70% mutual fund investors in India earn less than Rs 5 lakh annually

The mutual fund industry gets 30% of Assets Under Management (AUM) from individuals with an income of less than Rs 5 lakh annually, said the ministry of finance in a reply to a question in Lok Sabha.

According to Sebi data quoted by Minister of State in the Ministry of Finance, Pankaj Chaudhary, there are 1.85 crore mutual fund investors in the country. Among these, investors with income below Rs 5 lakh constitute 70%. However, the 70% investors only account for only 29% of the assets of the mutual fund industry. Investors with an income of more than 1 crore accounted for 31% of the mutual fund AUM.

The question that the minister was responding to came from Pravesh Sahib Singh, Member of the Lok Sabha.

“Details of mutual fund investors in the Indian financial market, in per cent and income-group wise;

(b) whether the Government believes investment in Mutual Funds could benefit the lower strata of the economic spectrum and if so, the details thereof;

(c) whether the Government has undertaken any awareness or education programmes to improve the financial literacy about Mutual Funds among the various economic sections of society and removing the qualifications, occupation and income barriers to entry into the market; and

(d) if so, the details thereof and if not, the reasons therefor?”

Here’s a look at the data presented by the ministry in Lok Sabha:

finminET Online

The ministry also informed the Lok Sabha that there has been a rise in investments in mutual funds from the B-30 cities. Total AUM from B-30 cities grew by 86% from Rs 3.48 lakh crore in 2019-2020 to Rs 6.46 lakh crore in 2021-22. The total AUM under the mutual fund industry has grown by only 68% during the same period. Apart from this there had been an increase in the Systemic Investment Plans from B-30 cities.

“SEBI has taken a number of regulatory initiatives for ensuring investor protection, integrity of the market, and for enhancing operational efficiency, market penetration and deepening of the mutual funds industry beyond the top 30 cities (B-30 Cities). Over the past few years, there has been a significant rise in investments in mutual funds from the B-30 cities,” Pankaj Chaudhary said in the Lok Sabha.


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