Certainly, the short-term scenario appears to be gloomy and all one can do is wait for some light to brighten up the situation. In the long run, however, the sector seems to be on a high tide. According to a recent McKinsey report, the total AUM is expected to grow at around 33% year-on-year from $92 billion in March 2007 to $350-$440 billion by 2012. In fact according to industry experts the current scenario happens to an ideal time to move in for the kill. “We would advise customers to come to markets at this point in time as valuations are cheap and to beat the market volatility they can opt for SIP or STP,” Bandhopadhyay tells 4Ps B&M. “Though the near-term headwinds are strong for equities as an asset class, we firmly believe that investing in this asset class, through professionally managed avenues like Mutual Funds and PMS schemes, would churn out above average returns for investors over the long-term,” agrees Hitesh Agrawal, the Head of Research for Angel Broking.
So, while all asset classes and segments are expected to contribute significantly to the industry’s growth, retail mutual funds (expected to grow at a CAGR of 36-42% annually taking the total AUM from $36 billion in 2007 to $160-$200 billion in 2012) and portfolio management services happen to be the key drivers of profitability for AMCs. In fact, dedicated infrastructure funds and real estate mutual funds are two promising areas where the real opportunity lies for the Indian asset management market. Moreover, with the growing popularity of commodity trading in two of India’s commodity exchanges, MCX and NCDEX, the country appears to be ready for commodity-traded funds, thereby creating an altogether new market for the mutual funds sector.
Certainly, these are interesting times for mutual
fund players. The sea of changes in the financial and economic scenario is bringing in a fresh wave of opportunities for the long run. But as always, with the industry’s expansion, increased challenges and growing competition will make it difficult for the smaller players to survive, leading to a wave of consolidation to knock on the doors. But as the economic growth in India swells, and wallets and regulators ease the reins further, asset management companies are bound to prosper. The only thing that they need to focus on is to get back to their boardrooms, scratch their heads and come up with a few effective answers to emerging challenges. Opportunities are huge, and some quick on-their-feet thinking can easily send Indian mutual fund players soaring upwards, to find their rightful place, under the global financial markets Sun!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
So, while all asset classes and segments are expected to contribute significantly to the industry’s growth, retail mutual funds (expected to grow at a CAGR of 36-42% annually taking the total AUM from $36 billion in 2007 to $160-$200 billion in 2012) and portfolio management services happen to be the key drivers of profitability for AMCs. In fact, dedicated infrastructure funds and real estate mutual funds are two promising areas where the real opportunity lies for the Indian asset management market. Moreover, with the growing popularity of commodity trading in two of India’s commodity exchanges, MCX and NCDEX, the country appears to be ready for commodity-traded funds, thereby creating an altogether new market for the mutual funds sector.
Certainly, these are interesting times for mutual
fund players. The sea of changes in the financial and economic scenario is bringing in a fresh wave of opportunities for the long run. But as always, with the industry’s expansion, increased challenges and growing competition will make it difficult for the smaller players to survive, leading to a wave of consolidation to knock on the doors. But as the economic growth in India swells, and wallets and regulators ease the reins further, asset management companies are bound to prosper. The only thing that they need to focus on is to get back to their boardrooms, scratch their heads and come up with a few effective answers to emerging challenges. Opportunities are huge, and some quick on-their-feet thinking can easily send Indian mutual fund players soaring upwards, to find their rightful place, under the global financial markets Sun!For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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