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INVESTOR PROTECTION & WEALTH CREATION THROUGH MUTUAL FUND INVESTING December 13, 2011 – New Delhi

Knowledge Partner

Crisil Research

The Associated Chambers of Commerce and Industry of India ASSOCHAM Corporate Office 1, Community Centre, Zamrudpur, Kailash Colony, New Delhi-110048 Tel: 011 46550555 (Hunting Line) | Fax: 011 46536481/82, 46536498 Email: [email protected] | Website: www.assocham.org

Table of Contents Mutual Fund industry trends................................................................................................................................... 1 Mutual Funds and wealth creation.......................................................................................................................... 7 Mutual Funds and Investor Protection................................................................................................................. 10 Indian Mutual Fund Industry – The Way Forward............................................................................................ 12

Charts and Tables Chart 1 – Break-up of financial savings................................................................................................................. 1 Chart 2 – Mutual Fund AUM across asset classes............................................................................................... 2 Chart 3 – AUM break-up for institutional and retail investors.......................................................................... 3 Chart 4 – Mutual Fund Inflows/ Outflows Trends.............................................................................................. 3 Chart 5 – AUM distribution by AMCs.................................................................................................................. 4 Chart 6 – AUM by geography................................................................................................................................. 4 Chart 7 - Net assets as % of GDP............................................................................................................................ 5 Chart 8 – Worldwide Total Mutual Fund Assets................................................................................................. 6 Chart 9 – India Vs Worldwide assets by type of fund......................................................................................... 6 Chart 10 – Mutual Fund Structure and Flow..................................................................................................... 10 Chart 11 - Rising share of savings and discretionary consumption in household income.......................... 12 Chart 12 - Middle and high income categories to expand at fast pace........................................................... 13 Table 1 - Category-wise returns generated by mutual funds across time frames........................................... 7 Table 2 - Sample asset allocation showing diversification benefits across risk profiles................................. 8 Table 3 – SIPs vis-à-vis traditional savings........................................................................................................... 9

List of Annexures Annexure 1 – List of Mutual Funds and Assets Managed as of September 2011......................................... 14 Annexure 2 –Risk / Return trade-off by Mutual Fund Categories & Indicative Investment Horizons..... 16 Annexure 3 - Folios across mutual fund schemes............................................................................................. 19

Mutual Fund Industry Trends

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he Indian mutual fund industry has come a long way since the formation of the Unit Trust of India in 1963 by the Government of India and the Reserve Bank of India (RBI). Currently, there are 44 mutual funds operating in the country with assets under management (AUM) of Rs 7.13 lakh cr (see Annexure 1) compared to AUM of around Rs.1 lakh cr as of December 2001. However, the quantum of mutual fun