Will the Juggernaut continue in 2024?

As we close the year 2023, it's evident that the industry is poised for a monumental milestone. The imminent crossing of the ₹50 lakh crore mark in Asset Under Management (AUM) in 2023 signals a remarkable trajectory, notably highlighting the industry's exponential growth. 

Consider this: it took five years to add the last ₹25 lakh crore to the AUM, yet the next ₹25 lakh crore is likely to be amassed in just half that time. These figures reflect not just growth but a paradigm shift in the perception of mutual fund investments. 

Currently boasting 16.18 crore folios and an estimated five crore unique investors, the industry's potential seems immense. However, let's draw a comparison to other consumer behaviours—over 50 crore people have OTT subscriptions, 25 crore have ordered food online, and over 20 crore have shopped online. Surprisingly, these numbers dwarf the count of mutual fund investors. This clearly shows the potential of new investors that may join mutual fund investments. Affordability isn't a deterrent here. In fact, with an estimated 20 crore individuals in India capable of becoming mutual fund investors, the issue doesn't seem to lie in accessibility. 

Consider the striking statistic that places mutual fund AUM as a percentage of GDP in India at 14 per cent, trailing significantly behind countries like China (23 per cent), South Africa (45 per cent), and Brazil (72 per cent). Even developed markets like the US, France, and Australia soar north of 100 per cent on this metric. 

This is an exciting juncture for the industry, but it also represents an opportunity—a chance to enlighten, engage, and empower more individuals to participate in this transparent and regulated avenue of wealth creation. 

Let us collectively work towards fostering a culture of informed and empowered investors, where mutual funds become an integral part of every individual's journey towards financial prosperity. 

Happy investing and happy new year..! 

Shashikant Singh
Executive Editor