July was a record month for mutual fund NFOs. At 30 new fund offers (NFO) and total inflows of over Rs 30,000 crore, it was the best monthly tally in over five years. Jio Blackrock’s three new funds alone raked in over half the money.
Jio Blackrock’s entry—it’s powered by two of the biggest names in global business—is no doubt one reason for the record inflows. But even setting that aside, India’s mutual-fund sector is getting a bit crowded, with the number of mutual-fund houses operating in the space just shy of hitting half-a-century. And at least 50 more NFOs are reportedly in the pipeline currently.
Clearly, investors have no dearth of choices, and aren’t hesitating to make them.
But… how many of them are good choices?
Much like many other financial instruments in India, and despite steadily growing investments and investors, mutual funds remain the domain of a few—just 3% of the country’s population makes such investments, as per financial services firm Motilal Oswal. From merchant banks to quant trading firms, a motley crowd of players all want to be the one to change this (and rake in that juicy additional revenue).
But many, if not most, of these “new offerings” hardly pass the viability test for the majority of investors.
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