The Indian mutual funds industry, which surpassed Rs 4-trillion mark in May, should penetrate into rural and sub-urban areas with affordable products to sustain the growth in the long run, a CII-PricewaterhouseCooper study has said.
"Tapping rural market is likely to be a big challenge for mutual fund companies. The fund houses need to offer products, which are affordable as well as competitive against low-risk and assured returns of government sponsored saving schemes," the study said.
It suggested the fund houses to tap on savings of retail investors by meeting basic requirements such as retirement planning, child education, taking a cue from mature markets like those of the US and the UK.
The study also suggested leveraging upon the growth prospects of commodity and real estate markets.
"Another major opportunity would be to go global. Indian investors are now allowed to invest up to $100,000 abroad," it said.
With a strong regulatory framework, clear guidelines and the required talent pool, the Indian mutual fund industry is in a position to cater to the new breed of investors, who are keen to diversify their risks, it said.