70% of mutual fund investors in India earn less than Rs 5 lakh per year
According to Sebi data cited by the Minister of State at the Ministry of Finance, Pankaj Chaudhary, there are 1.85 crore mutual fund investors in the country. Of these, investors with an income of less than Rs 5 lakh constitute 70%. However, the 70% of investors represent only 29% of the mutual fund industry’s assets. Investors with income above 1 crore accounted for 31% of the mutual fund‘s AUM.
The question the minister was answering came from Lok Sabha member Pravesh Sahib Singh.
“Details of mutual fund investors in the Indian financial market, in percentage and by income group;
(b) whether the government believes that investment in mutual funds could benefit lower sections of the economic spectrum and, if so, details thereof;
(c) whether the government has undertaken awareness or education programs to improve financial literacy on mutual funds among different economic strata of society and remove barriers related to qualifications, occupation and income to market entry; and
(d) if yes, details and if not, reasons?
Here is an overview of the data presented by the ministry to Lok Sabha:
The ministry has also informed the Lok Sabha that there has been an increase in investment in B-30 town mutual funds. The total AUM of B-30 cities increased by 86% from Rs 3.48 lakh crore in 2019-20 to Rs 6.46 lakh crore in 2021-22. The mutual fund industry‘s total assets under management grew by only 68% over the same period. Apart from that, there had been an increase in B-30 city systemic investment plans.
“SEBI has taken a number of regulatory initiatives to ensure investor protection, market integrity and to improve operational efficiency, market penetration and deepening of the mutual fund industry beyond beyond the top 30 cities (B-30 Cities). In recent years, there has been a significant increase in investment in mutual funds from B-30 cities,” said Pankaj Chaudhary in the Lok Sabha.