Domestic mutual fund industry to grow at 22-23% in FY07-08

New Delhi, Nov 15 (UNI) The domestic mutual fund industry is poised to achieve 22-23 per cent growth rate by end of the current fiscal notching assets size of about Rs six lakh crores, industry body Assocham said.

The industry has immense potential to grow even if it is able to reach 20 per cent levels of the countries like Brazil and Indian investors are better informed about the benefits of investment as compared to alternative investment avenues, it said.

In times of extreme volatile stock market, it is the comparable safer option of mutual funds which is attracting investors, Assocham said in a study.

Mutual funds which owned assets worth around Rs five lakh crores until about September 2007 may end up notching assets size of about Rs six lakh crores by March 2008, as it has started expanding its penetration at smaller towns with vigorous speed.

The industry grew at a healthy pace of 18-19 per cent in the last eight years against its worldwide growth rate of 13 per cent.

In the months of February and March, which are considered toughest due to large-scale redemptions to meet tax liabilities, also were active for the mutual fund industry, Assocham President Venugopal N Dhoot said.

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 emerging trends in the MF would be that the commodity funds will invest in commodities such as metals, food grains and crude oil, commodity companies, or commodity futures contracts.

UNI