Page 29 - Banking Finance September 2024

ARTICLE

growth is expected to continue as more investors embrace investments, enabling millions of Indians to participate
digital channels for their investment needs. in the equity markets with small, regular contributions.
The rise of passive investing, driven by the cost
The number of new investors entering the mutual fund advantages and market efficiency of index funds and
market through digital platforms has also seen a sharp ETFs, has provided investors with a low-cost alternative
rise. The rise of fintech apps like Paytm Money, Zerodha
to actively managed funds. Meanwhile, the advent of
Coin, Groww, and Kuvera has significantly contributed
digital platforms has revolutionized the investment
to this trend, with these platforms collectively onboarding
landscape, making mutual funds more accessible,
millions of new investors in recent years.
transparent, and user-friendly.
Conclusion
As these trends continue to evolve, the mutual fund
The mutual fund industry in India is undergoing a
industry in India is poised for further growth, with
transformation driven by the growth of SIPs, the rise of
increasing participation from retail investors and a
passive investing, and the impact of digital platforms.
broader acceptance of mutual funds as a key component
These trends reflect a broader shift in investor behavior,
of wealth creation. For investors, understanding these
with a growing emphasis on cost efficiency, accessibility,
trends and their implications is crucial for making
and convenience.
informed investment decisions in an increasingly dynamic
The growth of SIPs has democratized mutual fund and competitive market.

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6. International Funds India, Mutual funds have evolved significantly over the
Definition and Characteristics: International funds past two centuries, offering investors a wide range of
invest in equity or debt securities of companies located options to suit different financial goals, risk appetites, and
outside India. These funds provide Indian investors investment horizons. From the first mutual fund in the
with exposure to global markets, allowing them to Netherlands to the robust industry that exists today in
diversify their portfolios beyond domestic assets. India, mutual funds have democratized investing, allowing
individuals to access diversified portfolios managed by
Sub-categories:
professionals.
Global Funds: These funds invest in companies
across the globe, offering diversification across
The Indian mutual fund industry, in particular, has grown
geographies and sectors.
rapidly, especially in the last three decades, driven by
Region-Specific Funds: These funds focus on regulatory reforms, increasing investor awareness, and the
specific regions, such as the U.S., Europe, or introduction of diverse fund types. With a variety of funds
emerging markets, providing targeted exposure available-ranging from equity and debt funds to hybrid and
to those areas. international funds-investors can now tailor their portfolios
to meet specific financial objectives, whether it's wealth
Conclusion accumulation, income generation, or tax savings.
Mutual funds have evolved significantly over the past two
centuries, offering investors a wide range of options to As the industry continues to grow, driven by technological
suit different financial goals, risk appetites, and advancements and evolving investor preferences, mutual
investment horizons. From the first mutual fund in the funds are likely to play an even more significant role in
Netherlands to the robust industry that exists today in the financial planning of individuals.

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