The journey ahead for mutual funds will be exciting only if they address the issues of investor education, penetration and a competitive mutual fund sector.

India has taken great strides towards putting in place a good framework for the efficient functioning of the mutual fund sector, thanks to the efforts of Sebi. Indian regulations are among the most progressive regulations in the world, aimed at protecting the investor interest and growing the market.

Despite progressive regulations, the actual investor participation on the ground leaves a lot to be desired. The total number of folios across various schemes and across various Asset Management Companies (AMCs), according to AMFI data, is at 4.8 crore folios. A lot of double and triple counting would be present here, since the same investor putting money in different schemes and different AMCs would be counted more than once. In fact, we have less than 3% of India's population investing in mutual funds. A question that the sector is facing today is: "Where are the investors?"

In the earlier days, in India, there was complete government dominance of the financial sector, be it banks (SBI and other PSU Banks), insurance companies (LIC, GIC), financial institutions (IDBI, IFCI, ICICI), or Mutual Funds (UTI).

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