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The number of unique mutual fund investors in India is expected to grow by over 5 times from 4.5 crore to 26 crore by 2047 as the country moves towards its Viksit Bharat goal, according to a report by PwC.
The report highlighted the increasing role of mutual funds in wealth creation and financial inclusion, projecting a rise in market participation and deeper investor engagement in the coming decades. It said "The number of unique mutual fund investors is expected to grow from 4.5 crore to 26 crores during this period, with the average AUM per retail investor reaching INR 74 lakh". The report also mentioned that the mutual funds reach in the country remains relatively low. As of January 2025, only 5.33 crore investors have invested in mutual funds, whereas over 25 crore people shop online, and 2.8 crore travel abroad. This suggested that a large segment of India's population is yet to explore mutual funds as an investment option. To tap this vast potential, the industry needs to shift from a product-centric approach to an investor-focused strategy. This means understanding the diverse financial aspirations and challenges of different sections of society and offering tailored solutions. The report also forecasted a gradual shift in the retail-institutional mix of mutual fund assets under management (AUM). Currently, the ratio stands at 64:36, but by 2047, it is expected to move towards a 70:30 split, aligning with trends seen in developed markets. It said "The retail-institutional mix in mutual fund AUM is projected to shift gradually from the current 64:36 ratio to a 70:30 split by 2047, mirroring developed markets. Sustained market returns of 11 per cent annually and increasing mutual fund penetration from nearly 3 per cent to 15 per cent of the population will support this transformation". To achieve this transformation, the report added that the mutual fund industry must focus on three key factors: strategic orchestration, infrastructural resilience, and regulatory sophistication. These factors will determine the industry's ability to scale, innovate, and make financial participation accessible to all sections of society. The report emphasized the need for a central entity to coordinate efforts and balance the interests of investors, distributors, asset management companies (AMCs), and regulators. As India progresses towards its 2047 vision, the mutual fund industry is expected to evolve into a more investor-friendly and widely accepted financial instrument, contributing to the country's economic growth and wealth creation. (ANI)
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