Mutual Funds Industry to swell to Rs 9.50 lakh cr by 2010

New Delhi, Sep 26 (UNI) Mutual Funds (MF) Industry will grow at 30 per cent and touch Rs 9.50 lakh crore from present Rs 4.67 lakh crore in the next three years.

In a paper on 'MF Growth Patterns', brought out by Assocham, it is highlighted that in view of growing awakening and certainties prevailing in MF industry, its market penetration would more than double by 2010 from about four per cent now as gradually mutual funds are becoming preferred savings instrument for urban and rural people.

''Despite, its performance and track record exceeded between 1999 to 2007 and the industry grew at over 25 per cent CAGR and the trend will improve further as investors, particularly retail ones are choosing a good chunk of their savings volumes towards MF. It is because of this reason and other supportive favourable conditions, the MF industry will grow and touch the projected level of Rs.9.50 lakh crore by 2010,'' Assocham President Venugopal N Dhoot said.

Currently, the share of privately managed MF players in the total mutual fund industry size of Rs 4.67 crore is estimated at 82 per cent which will fall to nearly 70 per cent since private sector MF players would like to forge alliances with their overseas partners in the joint sector.

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 eight per cent now, added Mr Dhoot.

Comparing India's MF industry with the US, the Assocham findings, however, reveal, despite domestic MF growing at substantially higher rate in last three years, it is still 100 times behind US MF industry.

Its size is currently estimated at over 12 trillion dollars as against Rs 4.67 lakh crore of India with market penetration of four per cent of country's total population, compared to 49 per cent in the US and 20 per cent in th UK.

In India, MF industry manages nearly 700 schemes while the US MF industry has more than 12,000 MF schemes'.

UNI