Presented by-Priti and Manjit

Programm-BBA Sem-V Sec-A

Cource code-FIBA309
Enrolment no-A36106420117,A36106420014
Reason for slow growth in Mutual Fund
Industry in India. What is its future prospect.

What is a mutual fund?

A mutual fund is a type of financial vehicle that consists of a pool of money that many
investors have collected to invest in securities such as stocks, bonds, money market
instruments, and other assets.

Reason for slow growth in Mutual Fund

1. People don't have surplus of money.

2. Extra Expenses.
3. Market uncertainty.
4. Long term capital gains (LTCG)
5. Essel group default
6. Exposure to IL & FS
1. Extra Expenses

Mutual funds charge their fee based on the expense ratio and it is essential for one to have an
understanding about the same. Expenses could be repetitive, meaning one has to bear the
same every time until the redemption of the units.

2. Market Uncertainty

Even though, one may have chosen a fund with a great past record, however one cannot be
always certain about the markets.
One thing to always avoid doing is timing the markets, because the more one tries doing it, the
more he is at a chance of losing.

3. Long term capital gains (LTCG)

The 2018 Union Budget announced the return of the long – term capital gains tax, which
was much feared. Long Term Capital Gains tax levies a 10% tax on any gains that have
been made by a long term investment (more than one year) in the equity market (direct
equity or equity-linked mutual funds).
4. Essel group default

Kotak MF and nine other asset management companies (AMCs) — including some of the brand
names such as Aditya Birla, ICICI, HDFC, and Reliance — face default prospects on loans given
to Essel Group.

5. Exposure to IL & FS

Market has already suffered a blow due to exposure of many funds to IL&FS

6. people don't have surplus of money

In india people don't have surplus of money.At present, 60 per cent of India's population, or an
estimated 812 million people, live below poverty line. And they don't have enough of money
to invest in any funds
 What is its Future Prospects?

Future and Growth OF Mutual Funds in INDIA

There is a huge scope in the future for the expansion of the mutual
funds industry. A number of foreign based assets management
companies are venturing into Indian markets. The Securities Exchange
Board of India has allowed the introduction of commodity mutual funds.
The emphasis is being given on the effective corporate governance of
Mutual Funds. The Mutual funds in India has the scope of penetrating
into the rural and semi urban areas. Financial planners are introduced
into the market, which would provide the people with better financial
planning.