Assets under the management (AUM) of Indian mutual fund industry is expected to grow by 15-25 per cent over the next five years even as there may be challenges of declining profitability, a CII--KPMG study said on Wednesday.
The study released at a mutual fund summit organised by CII has projected the AUM to grow to Rs 15-18 lakh crore by the year 2015.
The growth could be in the range of 22 to 25 per cet in case of quick economic revival while it may slip to 15 to 18 per cent in the event of a slow pick up, the report said.
Increased retail and institutional participation and innovation in distribution would be among the factors that would spur growth, the study said.
The study has, however, warned that the growth in AUMs may not be music to the ears of the AMCs which may find their profitability declining.
"Revenues of asset management companies (AMCs) are expected to reduce due to focus on low margin products to attract risk averse investors and also as operating costs escalate due to focus on reaching out to retail investors beyond Tier-II cities", the study said.
The study released at a mutual fund summit organised by CII has projected the AUM to grow to Rs 15-18 lakh crore by the year 2015.
The growth could be in the range of 22 to 25 per cet in case of quick economic revival while it may slip to 15 to 18 per cent in the event of a slow pick up, the report said.
Increased retail and institutional participation and innovation in distribution would be among the factors that would spur growth, the study said.
The study has, however, warned that the growth in AUMs may not be music to the ears of the AMCs which may find their profitability declining.
"Revenues of asset management companies (AMCs) are expected to reduce due to focus on low margin products to attract risk averse investors and also as operating costs escalate due to focus on reaching out to retail investors beyond Tier-II cities", the study said.
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