The  mutual fund (MF) industry in India which grew at a healthy pace of 18-19 per cent in the last eight years against its worldwide growth rate of 13 per cent, is projected to grow faster, a survey predicted.
Indian MF industry, which owned assets worth around Rs 5 lakh crore until about September 2007, may end up notching assets size of about Rs 6 lakh crore by March 2008, as it has started expanding its penetration in smaller towns with vigorous speed, reported a study conducted by ASSOCHAM projects.

Asset Under Management (AUM) as percentage of GDP in India is 4.12 per cent as against 88.22 per cent in Australia, Germany 10.54 per cent, Japan 7.57 per cent, USA 61.27 per cent, Canada 34.33 per cent, France 59.63 per cent and Brazil 19.95 per cent.

It is being projected that in view of growing awakening and certainties prevailing in MF industry, its market penetration would more than double by 2010 from about 4 per cent now as gradually mutual funds are becoming preferred savings instrument for urban and rural folks.

Despite domestic MF growing at substantially higher rate in last 3 years, it is still many times behind US MF industry, the size of which is estimated at over $12 trillion. The market penetration in India is only 4 per cent of total population, compared to 49 per cent in the US and 20 per cent in UK.

Tiny size

In India, MF industry manages nearly 700 schemes while US MF industry has more than 12,000 MF schemes.
In India, the public sector share in current MF industry size will go up from nearly 20 per cent from less than 10 per cent now and that of joint sector to about 10 per cent from 8 per cent now, the study projected.