Summary

The mutual fund industry in India has come a long way since its modest beginnings in 1963. The past couple of decades have seen it gather pace, creating an edge for itself in the personal finance space. The industry’s assets under management (AUM) have soared past Rs 31 trillion, clocking an approx. 18% CAGR growth since the turn of the century.

In addition to the growth in assets, the industry has also seen an emergence of wide range of products across segments, however it continues to be dominated by actively managed funds with over 90% share. Comparatively, the global mutual fund industry especially in the developed and mature markets is seeing rising preference to passive funds.

Passive funds in India have grown exponentially in the past five years with its share up from 1.21% as of March 2015 to 8.64%, or ~Rs 2.57 trillion, in the December quarter of 2020. However, this growth has primarily been driven by money from institutional investors such as the Employees Provident Fund Organisation (EPFO).

Does the recent underperformance of active funds especially large caps versus benchmark warrant a change of strategy among individual investors to opt for the passive route?

Should passive funds form part of the asset allocations strategy for retail investors?

How does the distributor community look at the category of investments?

These questions among others would be detailed and delved at the first edition of CRISIL’s Advisor Connect-Chennai Chapter webinar series to be held on May 18, 2021.

Agenda