Mutual Funds double share in household financial savings

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Published: August 29, 2019 3:25:30 AM

The gross yearly household savings in India amounted to Rs 392 lakh crore in FY18, of which financial savings accounted for 60% – a CAGR growth of 15%.

Mutual Funds, Mutual Funds double share, household financial savings, CAGR, CAGR growth“This growing popularity of MFs among retail investors is driven by the increasing realisation that investments in MFs generate higher returns than any other traditional investment,” noted the AMFI-BCG report.

Mutual funds have doubled their share in household financial savings to 6% in FY18 from 3% in FY14, clocking a 31% compounded annual growth rate (CAGR), as against an overall CAGR of 15% in financial assets, according to a report published by the Amfi, in association with the BCG.

The gross yearly household savings in India amounted to Rs 392 lakh crore in FY18, of which financial savings accounted for 60% – a CAGR growth of 15%. Meanwhile, the share of traditional savings instruments like fixed deposits of the total household savings fell by 200 bps to 39% in FY18 from 41% in FY14. “This growing popularity of MFs among retail investors is driven by the increasing realisation that investments in MFs generate higher returns than any other traditional investment,” noted the AMFI-BCG report.

Retail investors now account for a majority of the industry-wide assets under management (AUM) outpacing corporates and institutional investors with a dominant 58% share (Rs 13.8 lakh crore of Rs 24 lakh crore). Individual investors’ AUM recorded a 28% CAGR between FY14 and FY19. During the same period, corporate AUM registered a 19% CAGR, the report said.

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