?Mutual funds have ability to grow 35%-40% for next 2-3 years?

Several key issues were discussed at the day-long Mutual Fund Summit like future of the industry, challenges and emerging opportunities for the MF industry, but the main focus of the meet remained the investor education, distributors penetration in the rural cities and inclusion of pension sector funds. Also the future of real estate mutual funds (REMF) which will soon be launched in the India was discussed in the meet.

UK Sinha, chairman CII Mutual Fund Summit 2008 and CMD, UTI Asset Management Company said, “The Indian MF industry has grown at the compounded Annual Growth Rate (CAGR) of 47% between 2003-08, which is next only to Russia at 97% and China at 67% during the same period. There are reports to say that in the next 2-3 years, the MF sector will grow at 35-40%. In order to place the mutual fund industry at a level-playing field with other sectors, government could consider softening or removal of inter-regulatory arbitrage and pension sector reforms. Focus should also be on investor education by spreading financial literacy.”

AP Kurian, chairman, Association of Mutual Funds in India (Amfi) said, “We have brought few reforms such as reader-friendly offer documents, but still much work need to be done to improve the industry standards. Now we have suggested to the regulator to simplify the annual reports of the AMCs, so that people can understand the report. We hope that regulator will look in the matter and we expect some positive decision.” There were few people who commented on the distribution side in the MF industry. Ajay Srinivasan, chief executive officer (Financial Services) and director (Corporate Strategy & Business Development), Aditya Birla Management Corporation said, “In the US 43% of households invest in the mutual funds, while we have only 4% household saving going to MFs in India. If we want MF industry to scale newer heights, we should have proper investor base and distributor?s guidance.”

Uwe Stoschek, Global Real Estate Tax Leader, PriceWaterHouseCoopers LLP, said, “Now that the Indian regulators have laid down the guidelines for the launch of REMF. I think that certain important things like guidelines of the REMF should be kept with the international standards and frameworks should be simple and understandable. I think that there is huge potential in the India and I hope that REMF too shall meet the same level of success.”