Those in Rs1 Crore-Rs5 Crore Income Slab Are Biggest Contributors in Mutual Fund Investment
Moneylife Digital Team 29 November 2021
While investment in mutual funds (MF) is considered to be relatively safe or less risky than directly investing in equity, people who earn Rs1 crore to Rs5 crore turned out to be the most significant contributors with a 31% share in total assets under management (AUM) of mutual fund companies in India. 
 
In a written reply, Pankaj Chaudhary, minister of state for finance, informed the Lok Sabha that as of 31 October 2021, over 135,000 investors earning Rs1 crore to Rs5 crore had invested Rs9.93 lakh crore in MFs. This contribution comes to 30.91% of the total money invested by investors in MFs. 
 
According to the information shared by the minister, there are 18.6 million unique individual investors in India. The investment made by these investors took the total AUM of mutual funds in India to Rs32.10 lakh crore.
 
The second highest contributor in the MF investment is from those who earn Rs1 lakh to Rs4 lakh, whose contribution in total AUM is Rs7.72 lakh crore or 24.04%. This group, at 61.21%, is the biggest contributor in the total number of individual investors in MFs.
 
Those earning Rs5 lakh to Rs10 lakh are the third-largest group of individual investors, at 19.28%. This group has contributed Rs5.98 lakh crore or had a share of 18.64% in the total AUM of MF investments in India. 
 
Surprisingly, those earning Rs5 crore and above seem to be very reluctant to invest in MFs. Only 245 investors from this earning group had invested Rs408.86 crore in MFs, data provided by the minister shows.
 
 
Market regulator Securities & Exchange Board of India (SEBI) has taken a number of initiatives to enhance operational efficiency and market penetration of the MF industry beyond the top-30 cities (B-30 cities). 
 
"Over the past few years, there has been a significant rise in investment in MFs from the B-30 cities. Total AUM from B-30 cities has grown by 86% to Rs6.46 lakh crore in 2021-22 (till 31 October 2021) from Rs3.48 lakh crore in 2019-20. At the same time, the total AUM of the MF industry has grown only by 68% during the same period. There also has been an increase in the number of systematic investment plans (SIPs) from the B-30 cities," Mr Chaudhary, the minister, says.
 
According to the data shared by the minister, during April and October 2021, SEBI has conducted 3,686 invester awareness programms (IAPs), online as webinars, which 292,000 investors attended. 
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