The mutual fund (MF) industry has a new reason to celebrate. Non-resident Indians (NRIs) are queuing up to grab a share of the booming equities market through the MF route. In fact, the share of NRIs to the total assets under management (AUM) of the MF industry has been rising rapidly since 2004. According to the latest figures collected by the Association of Mutual Funds in India (Amfi), the share of NRIs in the total AUM has risen from just 2% in March 2004 to 5.34% now.
In absolute terms, the numbers are even more dramatic. While the net asset value of NRI investments in MFs stood at Rs 2,792 crore on March 2004, the figure soared to Rs 17,556 crore in March 2007. The trend is pronounced, and is getting stronger by the day.
Says AP Kurian, chairman, Amfi: ?In terms of numbers of accounts, too, the NRI share has been rapidly growing. From just 1.14-lakh accounts in 2004, the figure is now up to 5.60 lakh in 2007.?
Kurian explains that the soaring indices in the Indian equity markets and the surpluses generated by the NRI community are the key reasons for the surge in NRI investments into MFs. So much so, that spotting the trend, some broking firms are now busy chalking out detailed strategies to hawk MF products in areas with a large Indian population.
Broking sources said firms are targeting markets like Dubai, Abu Dhabi, Muscat and Bahrain to garner more NRI investments. NRIs in Europe and the US are next on the broking firms? agenda. ?Money is coming mostly into equity schemes. But other schemes are getting funds from NRIs, too,? a source said.