Retail Investors in India consider Fixed Deposits of banks as liquid n safe and an easy investment option. Little do they realize that interest rates are falling drastically and taxable Investment products like FD’s rarely beat inflation. A post-tax return of 4-6% is neither inflation positive nor lucrative in any way. Today Mutual Funds have emerged as the ideal options for the common man as an investment that is professionally managed and generates high returns. In fact, MF industry has known to give amazing returns to the investors thereby surpassing returns on traditional investments such as LIC, FD’s, NSC’s and even fixed assets like property and real estate.
Retail investors are unaware of various Financial products like Mutual Funds. The perception that it is a “Risky Asset” is the reason why Household penetration of Mutual Funds in India is a paltry 4%. As against over 50% in the developed world. The major percentage of the investors continue to invest in traditional and run of the mill investment options such as real estate, fixed deposits, gold etc. This, in spite of the fact that all the above are taxable.
The biggest obstacle that needs to be overcome is lack of awareness associated with mutual fund vis a vis a vis other investment products. Ignorance stems from the fact that the investors are not educated about the myriad benefits associated with mutual funds. Retail investors and not aware that besides reaping high returns they can enjoy liquidity and tax-free benefits. In fact ELSS (Equity Linked savings schemes) qualify for tax incentive Under sec 80CC of the income tax act and can easily be substituted for products like PPF, NSC, and LIC. One can then safely surmise that there is a definite need to create top of the mind awareness about the MF products. We at Mutualfundwala and trying to fill this existing wide chasm and create knowledge and awareness. We are using all means of social media, Youtube, Online, and Offline presentations, Roadshows etc to create awareness. Mutual fund advisor mutualfundwala is also exploring new marketing tools and strategies such as Search engine optimization, online Videos etc to create awareness.