On the economic stage, the financial services sector is incomplete without the asset management industry.
Why is that?
Because the asset management industry is that channel that performs the work of garnering investor capital towards the economy. So, it acts as a backbone.
The Indian asset management industry took about five decades (50 years) to achieve the asset under management worth 10 trillion. The surprising fact was that the next 10 trillion AUM was amassed in just 5 years! This implies India has a great potential to prosper in this sector.
But for that, we need better integration of digitization, asset management companies and mutual fund distributors.
Here's all you need to know about the mutual fund industry in India
The evolution of the mutual fund industry in India primarily began after the first UTI scheme was launched in 1963. The entities from the public sector were born in 1987 and it was after this milestone when the asset under management started to expand in India. Since then both the private and public players have been playing their parts in pushing the asset management industry.
You can trace the evolution of the mutual fund industry in India through the following infographic.
Over the years, if we look at the product portfolio of the mutual fund industry in the country then the bandwidth has undoubtedly expanded. On one hand, the products like Systematic Investment Plans (SIPs) enabled the participation of masses then the products like Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS) suited the needs of high earning individuals.
One of the most salient campaigns set up in the asset management industry of India was ‘Mutual fund Sahi hai’ aimed at taking more customers on board by fabricating awareness among the general public.
However, since the second half of FY19, the situation has been a little sour and growth has been sluggish in this industry. One of the major reasons behind it was the liquidity crisis of NBFCs that sparked around the second half of the year 2018.
But, the cumulative efforts by the shareholders, fund houses and regulators for getting back on the track of growth have proved to be a blessing in disguise.
Now that I have laid down information on how the mutual fund industry evolved in India, let us talk about the performance statistics!
To understand the performance of any sector or industry, we must analyze its reach in even the remote areas of the country.
We Indians do not hold numbers when it comes to investing. But, people have this notion where they believe that mutual fund investment provides relatively safer routes of investments too.
Despite this, the penetration of mutual funds in our country stands to be significantly lower as compared to the world or even the developed economies. The AUM (asset under management) is only 11% more than the GDP of India. Whereas in the United States it is around 103% more than the country’s GDP.
So, although there has been average advancement in the mutual fund industry, India still has a long path to walk!
As mentioned in the former part of the blog, during the past 5-6 year the acceleration in the growth of the mutual fund industry. This growth has been mainly aided by increasing awareness among investors and higher financial savings.
For a better understanding of how the mutual fund has grown have a look at the following graphical representations
As far as the growth is concerned the journey of the Indian mutual fund industry has been amicable but it can certainly be better.
For achieving a better mutual fund ecosystem in the country the role of mutual fund distributors or related platforms forms a very integral part.
So let us decode how the mutual fund distributors have an important role to play.
The mutual fund distributors are the ones who help the investors to buy and sell various mutual funds. Whenever the mutual fund distributors bring investors completely conceive the investors to buy any scheme, they earn a certain amount of commission. The range of work carried out by the mutual fund distributors include:
They suggest and advise them about the schemes presented by the mutual fund houses.
They help investors with various kinds of investment transactions like redemption, changing mutual fund schemes and investing.
They provide their expertise and guidance about how their respective investments are performing.
For aiding the investors with the best of services, the mutual fund distributors need to do constant tracking and regular monitoring of the schemes. The quantitative analysis of the performance of mutual fund schemes requires comprehensive vigilance of various databases from time to time. This entire job of tracking, monitoring and analysis can be tiresome and requires a lot of efforts as well as time.
But, if the mutual distributors will have access to just a single platform which could make their work less complex and less time consuming, it will work in their favour.
Well, this is where NSE India stepped in!
Back in 2019, the biggest stock exchange in India, a report by Economic Times read that the National Stock Exchange wanted to move more of its technological operation to the cloud-based system.
For encouraging more investment in the country, it wanted more technical integration so that investing becomes hassle-free for people. Well, to say the least, it is making efforts in this direction.
And, NSE Invest is the result of such efforts!
NSE India made a big move towards blending digitization and mutual fund investing by launching its cloud-based platform that goes by the name, NSE Invest.
It is a one-stop platform that provides you with extensive and cloud-based services so that you as investors can have a smooth experience while allocating your hard-earned money towards mutual funds. With the help of this digital platform, NSE sought to expand its association with investors in India.
The question is how?
Well, the main focus of NSE Invest lies in serving the mutual fund distributors. In the former section, we established that the mutual fund distributors have a crucial role to play when it comes to making investing a trouble-free experience. Along with that, so as to facilitate the investors, their job involves working with multiple databases and websites. However, with NSE Invest, mutual fund distributors can use an inclusive platform that can simplify their work.
It provides an integrated ecosystem of software and services through which the mutual fund distributors can not only optimize their operation but reach more and more investors.
It continues to help the investors to achieve their financial goals
The entity invests around 35% of its revenue towards Research and Development for shaping the future of mutual fund investing.
As the awareness about investing is spreading, more people are entering the market and investing. Therefore, the workload of businesses involved in managing and attending to the investment needs of the investors also surges. The professionals working in these businesses have to work tirelessly and so that they can serve their clients in a good way.
But, with NSE Invest the things have become uncomplicated for mutual fund distributors as a single comprehensive platform presents them with all the things they require. All the mutual fund distributors can register on the platform by following the steps mentioned below:
Visit the official website of NSE Invest and as you see the homepage just click on the ‘Distributor’ tab.
You will be directed to the NSE mutual fund extension page where you will have to click on the ‘Subscribe’ tab
Once you key in the subscribe tab, a number of plans will be displayed with their price and you can opt for the one that suits your requirements.
Once you choose a plan you will be directed towards the payment page, where you will have to key in basic information like Billing Details, Billing Address, Etc.
After you are done filling in the payment details, accept the terms and conditions after thoroughly reading them.
On the next page, select ‘Success’ through the drop-down menu and key in the details of the registration form as the last step.
The entire registration process takes a few minutes only.
So, if you are involved in the mutual fund distributor industry, this platform is for you. Grab all the amazing services that it has to offer!
The purpose of NSE Invest lies in providing a helping hand to the capital market.
Ultimately, if the capital markets will be popularized more people will join the investors’ bandwagon and become financially fit.