MF industry seeks management of pension, provident, insurance funds

The aim of doubling the asset under management to Rs 80 lakh crore can be met earlier than the targeted year of 2027, if the mutual fund sector is allowed to manage pension, provident and insurance funds, an industry body official said on Saturday.

The Association of Mutual Funds in India also anticipated that AMC Repo Clearing Ltd (ARCL) will become operational from January 2023, which will provide a fillip to the wholesale corporate debt market.

“We want the government to allow the mutual fund industry to manage funds of pension, provident and insurance firms. This will help the MF industry ensure greater efficiency in managing the resources in a cost-effective manner. The industry can achieve the target of doubling the asset under management to Rs 80 lakh crore much earlier than the targeted year of 2027,” AMFI chief executive N S Venkatesh said at a programme organised by the Indian Chamber of Commerce.

The current asset under management (AUM) of mutual fund industry is Rs 40 lakh crore, he said.

AMFI had already put forward the demand in their budget proposals, Venkatesh said.

Speaking about the ARCL, he said the equity capital of the entity is currently at Rs 150 crore and is contributed by all asset management companies (AMCs) in proportion to their AUM of open-ended and debt-oriented mutual fund schemes for 2020-21.

“With this, AMCs will be able to improve their return by using corporate debt securities as against the one and only option of government securities with guaranteed liquidity.

“Market regulator SEBI is to be given credit for this, which will go a long way in developing the debt market in India,” he said.

AMFI is also planning to launch a portal that will do analytics of the entire mutual fund industry in a structured way, he said.

“The big data portal will be ready by April 2023 where all the MF data will be pooled in a single point in a structured fashion which will help the industry to do analytics and come out with innovative products,” the official said.

He also said mutual fund investors have shown “resilience” amid profit booking and correction, and continue to invest in SIPs.

As per the data, flow through SIPs was Rs 13,306 crore in November, surpassing the previous high of Rs 13,041 crore in October.

Venkatesh hoped that inflow from SIPs will not decline amid a sharp fall in inflow in equity funds in November due to volatility.

Speaking on the industry, SEBI Whole Time Member Ananta Barua said, From 1991 to 2002, the market experienced a huge boom as many investors contributed significantly to the investment sector. However, due to inflation after 2002, the investment sector suffered multiple erosions. In the midst of this, policymakers and business leaders were working to revitalise the mutual fund industry.

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