Mutual Funds India - A Growing Market

If you are thinking of investing in mutualfunds, particularly for the first time, it is not likely that the first funds which come to mind are going to be mutual funds India. It is more likely that you would choose a large and well-established fund which has been in operation for a long time. Although the mutual funds India market is not as well known as the larger mutual funds markets in the West, its size and worth are rapidly increasing and it is exhibiting very high profits and rates of growth.

This can be seen when you consider the 2000% increase in assets contributed by Indian households to mutual funds in India over the last three years. The fact that these funds are still at an early stage of development due to the market not having been around for that long means that investors considering mutualfunds investments in India will find not only that the various sizes of fund, but also the amount of investment options open to them, is constantly growing.

What are Mutual Funds in India?

A different generation of investors is being attracted to mutualfunds in India because of the young nature of the market. As it is more turbulent, with higher highs and lower lows, the profits which investors stand to make are larger. They can buy shares when the market is at a low, and then sell them at a profit once it has recovered. As a consequence of this, the rate of share turnover is constantly high, and the various trusts and foundations managing the funds are always very busy as they rush to cope with the ebbs and flows and the investment transactions they create.

Mutual Funds with a Religious Twist

Another thing which some mutual funds in India are doing very differently from those in the West is the compliance with Shariah law. This means that they will only invest in commodities allowed under this Islamic edict. Although this may seem odd to a non-Muslim, as it will definitely narrow the range of commodities the fund can invest in, but when you consider that a significant portion of the worlds finances are under the control of Muslims, it does make sense. Thus these Shariah-compliant mutual funds, which do not invest in the entertainment industry (including hotels or cinemas), anything to do with pork meat, financial institutions, any company which deals in either alcohol or tobacco, or defense and arms manufacturers.

Will This Growth Continue?

When one considers the extremely high rate of growth which has been seen over the last few years, it is likely that mutual funds India will continue to enjoy a relatively stable growth rate, even considering the current financial climate in which we find ourselves.

The newfound access to mutual fund investments for Muslims has meant that there is a lot more capital which can now potentially be invested into mutual funds India, which bodes very well indeed.

What are mutual funds in India expected to do over the next few years? I anticipate that they will continue to grow and prosper. The market is still very young, meaning that at its current stage there is a lot of money to be made, which will attract investors and the adoption of religious values by some of the funds has also allowed a whole new group of investors' unprecedented access to the market.

In the current financial climate, none of the worlds markets are looking particularly healthy and only the strong will survive. With all the power and vitality given to it by its youthful nature, the mutual fund market in India is going to power on through.