Key Trends that will shape the future of the Indian Mutual Fund Industry

Looking at the factors that can change the dynamics of the Indian mutual fund industry

The Indian mutual fund sector has seen significant growth in recent years, with more and more investors turning to this investment option to grow their wealth. With the current market conditions, it is important to stay updated on the latest trends and developments in the mutual fund industry in India. In this article, we will look at some of the key trends that will shape the Indian mutual fund sector in the times to come.

Increase in Digital Adoption

With the rise of digital platforms and the growing importance of technology in the financial industry, it is no surprise that the Indian mutual fund sector is also seeing an increase in digital adoption. A range of digitally advanced analytical, ranking, and tracking solutions are available in the market that help with screening, evaluating, comparing, monitoring, and tracking of mutual funds.

Growth in SIPs

Systematic Investment Plans (SIPs) have become increasingly popular in the Indian mutual fund sector in recent years. SIPs allow investors to invest a fixed amount at regular intervals, rather than investing a lump sum. This investment strategy is particularly popular among first-time investors and those looking to invest in mutual funds over a long period of time. With the growing popularity of SIPs, mutual fund companies are now offering various options and plans to attract more investors. At the end of CY22, there were 6.12 crore Mutual Fund SIP accounts, the total sum collected through SIP during December surpassing Rs. 13,000 crore.

Focus on ESG Funds

Environmental, Social and Governance (ESG) funds are becoming increasingly popular among Indian investors. These funds invest in companies that meet certain criteria related to environmental, social, and governance practices. As more and more investors are becoming conscious of the impact of their investments on the environment and society, mutual fund companies are now offering more ESG fund options to attract these investors.

Rise of ETFs

Exchange-Traded Funds (ETFs) are becoming increasingly popular among Indian investors. ETFs are like mutual funds, but they are traded on stock exchanges, like stocks. ETFs offer investors the ability to diversify their portfolios, as they can invest in a basket of stocks, bonds, or other securities. With the growing popularity of ETFs, mutual fund companies are now offering more options to attract these investors. More than 160 ETFs are on the offer currently.

The Indian mutual fund sector is witnessing an increase in digital adoption, growth in SIPs, focus on ESG funds, and rise of ETFs. These trends are shaping the mutual fund industry in India and are expected to continue in the future. For all stakeholders of the mutual fund industry, it is important to stay updated on these trends and developments and maintain a 360-degree view of the industry.?

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