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Mutual Funds India – A Growing Market

If you were going to invest in a mutual fund, it is likely that you would select one of the larger, well-established funds which have been operational for years as opposed to a fund in an emergent market such as mutual funds India. However, though this market may be slightly less well-known than those in the West, it is rapidly growing in size and worth, showing very high rates of growth and large financial profits. As this market has not been around for a very long time, it is at an early stage of development and as such both the size of fund and the amount of options open to investors is constantly growing.

Mutual Funds – Look To The East

Over the last three years, the amount of assets being contributed by Indian households to mutual funds India has increased by 2000%. The top mutual funds in India have shown a huge amount of growth over the last few years, even outstripping their more established cousins in the United Kingdom and America in terms of the rate of growth.

As the market itself is still very young, it is attracting a different generation of investors with a relatively superficial interest in the market – they will purchase more shares when the market falls on its face, and then sell these at a profit once it rallies and booms. This ensures a constant high turnover of shares and means that the investment corporations or trusts are providing their customers with a high quality intermediary service in order to cope with this constant flow of shares.

Mutual Funds – Hold The Pork

One practice which is likely to ensure the continual high growth rate among mutual funds India is that of investment corporations which do not touch any stocks which are not in keeping with the Muslim Shariah Law. This means that the capital invested by the mutual fund will not be put into industries such as defense or arms manufacturers, companies dealing in alcohol or tobacco, any company which deals in pork meat, the entertainment industry (i.e. hotel or cinema chains), or banking and investment companies. To a non-Muslim, it may seem that this will somewhat narrow the scope of the fund, and consequently, its likelihood to generate a profit, however when one considers that a large amount of the worlds finances is under the control of Muslims, these new top mutual funds stand to make a large profit.

This new initiative, which has opened up the market to a high number of very affluent Islamic investors, has exposed mutual funds India to a whole new area of growth which is likely to ensure that the high rate of growth which we have seen over the last few years is likely to continue.

Of course this means that the companies invested in by these new top mutual funds are subjected to a highly rigorous screening process which ensures that none of the capital invested will be used for a purpose not in keeping with Shariah Law. Islamic investors are also prohibited from earning a large amount of interest on their investments – this aspect of Shariah law has also been addressed by these new investment companies, thus opening the market up even further to potential investors who have not been able to take part in a more 'Western' mutual fund as it would be difficult to guarantee that those managing the trust would not invest in a non-Shariah compliant area.

The Growth of Mutual Funds in India

The market for mutual funds India is showing a high rate of growth, and in my opinion this is likely to continue. Doors have been opened which will allow access to a whole new type of investor, and although this means that the investment companies will need to comply with a number of strict regulations, these new investors will bring a large amount of capital into the market. Although they are still quite immature, these new top mutual funds have a solid base on which to grow, and they are going to grow big and strong.