As the financial landscape in India witnesses a significant shift, the mutual fund ecosystem has played a crucial role in this transformation, stepping up remarkably to earn the trust of Indian investors, the Securities and Exchange Board of India (SEBI) said on Friday.

Addressing industry chamber Assocham’s ‘16th Mutual Fund Summit’ in the national capital, Ananth Narayan Gopalakrishnan, Whole-Time Member, SEBI said that more and more individuals are channelling their savings towards risk capital formation. This is evident from the impressive growth in unique mutual fund investors, reflecting a compounded annual growth rate (CAGR) of 18 per cent.

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“Over the past three years, key benchmarks, including the Sensex, have delivered a commendable compounded annual growth rate (CAGR) of 14 per cent, with an annualised realised volatility of just 14.3 per cent. Compared to global markets, this performance stands out for its higher returns and lower volatility,” Gopalakrishnan told the gathering.

“By ensuring that funds are passed on the day of settlement, we are reinforcing our role in market development and regulatory advancement”, he added.

According to Sundararaman Ramamurthy, Managing Director and CEO of BSE, the primary regulatory change that has occurred in the past year is the democratisation of access to information.

“The nation’s regulatory framework is more transparent, which has encouraged more people to research the stock market. In four years, the number of demat accounts has increased to 16 crore. People with incomes should be knowledgeable about mutual funds. To fully realise its potential, the number of fund houses and distributors should rise,” Ramamurthy added.

He further suggested to boost passive funds. Given that women control 39 per cent of MSMEs in this nation, many more women should have access to this potential for financial security, he added.

“Improving the domestic situation for wealth distribution and ensuring investments are tapped by larger populations,” Ramamurthy said.

According to data from the Association of Mutual Funds in India (AMFI), the mutual fund industry’s net AUM increased by 3.8 per cent to Rs 61.15 lakh crore at the end of June, as against Rs 58.91 lakh crore as on May 31.

Sandeep Bhardwaj, Co-Chairman, National Council on Capital Market and Investors Protection, Assocham, said there has been a resilient growth in the financial market and investor sentiments are attracting more investments by mutual fund inflows with SIP Plan and long-term investment options.

“The modern Indian stock market is the third biggest in the world and creates a robust health metric for the industries,” Bhardwaj added.