Mutual funds in India

Despite being available in the market[2] less than 10% of Indian households have invested in mutual funds.[3] A recent report on Mutual Fund Investments in India published by research and analytics firm, Boston Analytics, suggests investors are holding back from putting their money into mutual funds due to their perceived high risk and a lack of information on how mutual funds work.[4] There are 46 Mutual Funds as of June 2013.[5]

The primary reason for not investing appears to be correlated with city size. Among respondents with a high savings rate, close to 40% of those who live in metros and Tier I cities considered such investments to be very risky, whereas 33% of those in Tier II cities said they did not know how or where to invest in such assets.

Larger Indian Mutual Fund Industry has benefited from outsourcing the activity of servicing their investors to two of the leading Registrar and Transfer Agents (RTAs) in India namely CAMS and Karvy. While CAMS commands close to 65% of the Assets servicing, rest is with Karvy. Franklin Templeton Mutual Fund services its investors through its own in-house RTA set up.

Both the RTAs have a vibrant network of their local offices which enable the Mutual Fund Investors to transact locally. These touchpoints (or) Customer Service Centers (CSCs), provide a wide range of servicing including, financial transaction acceptance & processing, non-financial changes, KYC fulfillment formalities, nomination registration, the transmission of units apart from providing a statement of accounts, etc.

Assets under management (AUM) is a financial term denoting the market value of all the funds being managed by a financial institution (a mutual fund, hedge fund, private equity firm, venture capital firm, or brokerage house) on behalf of its clients, investors, partners, depositors, etc.
The average assets under management of all mutual funds in India for the quarter Dec 2015 to Mar 2016(in ₹ Lakh) is given below:[6]