Mutual Fund Investors to Hike From 4.5 Crore to 26 Crore by 2047 in India; Says Report
The number of investors investing in mutual funds in India is more likely to grow over 5 times from 4.5 crore to 26 crore by 2047 as the country is moving toward the ‘Viksit Bharat’ goal, as per a report.
Mutual Fund Industry to Witness a Significant Rise
The report emphasized the role of mutual funds in building wealth and financial inclusion. It was predicted that in the coming years, the participation and engagement of investors in mutual funds would experience heavy growth.
It is also mentioned in the report that the reach of mutual funds in the country remains relatively low. This shows that a large portion of the population has yet to explore mutual funds. As of January 2025, only 5.33 crore investors have invested in mutual funds. On the other hand, 2.8 crore people travel abroad and over 25 crore people shop online.
To grow the engagement of investors in mutual funds, the industry needs to move from product-centric (focusing on selling the product) to an investor-focused strategy (focusing on the needs of investors). This involves understanding the different financial goals and challenges faced by different sections of society and providing solutions according to their needs and wants.
Other Highlights from the Report
The report also predicted that the proportion of retail investors to institutional investors in mutual fund AUM will shift slowly. The current ratio is 64:36, but by 2047, it is likely to shift to a 70:30 split, as seen in developed markets.
This change will be supported by consistent market returns of 11% per year and an increasing rise in mutual fund participation, with the number of investors growing from nearly 3% to 15% of the population.
The report further added that the mutual fund industry needs to focus on three key factors.
Key Factors to Focus On
These key factors are as follows:
- Strategic orchestration: This refers to a strategy that allows firms to adapt to dynamic environments that change quickly, get to market faster and lower their invested capital. It makes sure that all parts of a business work together smoothly to drive growth, innovation, and efficiency.
- Resilience on Infrastructure: The mutual fund industry can withstand, adapt to, and recover from challenges or disruptions. It involves a strong, flexible, and reliable infrastructure that can support the growth of the industry and manage potential risks or crises.
- Regulatory sophistication: This basically means having rules and regulations that are smart, clear, and well-designed to manage the financial industry. It ensures that these rules not only protect everyday investors but also meet the needs of more experienced or sophisticated investors.
These factors will determine the ability of industries to create innovative ideas and enhance the financial participation of all sections of society. The mutual fund industry is expected to shift towards a more investor-friendly and widely accepted investment scheme by 2047.
