MF Industry may hit Rs 400 lakh crore by 2035: Union MF CEO

United News of India

5 hours ago

Bengaluru, Aug 21 (UNI) Union Mutual Fund's Managing Director and CEO, Madhu Nair today projected that India's mutual fund industry could grow nearly six times to ₹400 lakh crore by 2035, riding on strong economic fundamentals, investor participation, and disciplined savings culture.
'As of July 31, 2025, the industry's assets under management (AUM) stand at ₹75 lakh crore. With an annualised growth rate of 16–18%, we could be looking at ₹400 lakh crore in just a decade. The rule of 72 tells us that at 18%, assets double every four years—₹75 lakh crore becomes ₹150 lakh crore, then ₹300 lakh crore, and eventually crosses ₹400 lakh crore,' Nair told UNI at the launch of the Union Diversified Equity All Cap Active Fund of Funds.
Union MF itself has nearly doubled its AUM within a year, from ₹13,000–13,500 crore to nearly ₹25,000 crore.
On returns, Nair explained that investors should expect 12–14% annualised equity gains over a five-year horizon, instead of chasing yearly numbers. 'India's GDP is expected to grow at 6–6.5%, with inflation around 4–4.5%. That gives us a nominal GDP growth of 11%. A well-run fund should deliver slightly above this, around 12–14%. But it won't be a straight line—some years may be negative, while others can bring 20–25% gains,' he said.
Clarifying the role of taxation, he said GST is applied on fund management expenses and transaction charges, not on investor returns directly. 'Costs do get impacted, but GST is not the deciding factor in wealth creation. What matters far more is asset allocation, patience, and discipline,' Nair added.
On asset classes, he highlighted that equities remain the only reliable way to beat inflation in the long run, while gold has regained importance as a hedge against both inflation and currency risks. 'India's central bank has doubled its gold allocation from 6% to 12% in two years, and globally, central bank purchases have tripled. With supply constrained and demand rising, gold will remain crucial. Every portfolio should have at least 18–25% exposure to gold,' he said.
Nair said multi-asset funds, which blend equity, debt, and gold, are best suited for reducing volatility. 'Last year, when pure equity funds posted negative returns, multi-asset funds managed positive performance because gold and debt provided balance,' he noted.
He further described India's growth phase as a 'super-cycle,' comparable to Japan's boom between 1970 and 1990, the US between 1980 and 2010, and China between 2000 and 2020. 'India is now in its own high-growth phase, and disciplined investors who remain invested for 20–30 years stand to create intergenerational wealth,' he said.
Advising investors, Nair stressed the importance of matching investment choices with their goals and timeframes. 'For long-term goals, equity is essential. For medium-term goals, hybrid funds work better, while fixed income is more suitable for short-term needs. Ultimately, investing is not about intelligence—it is about patience, discipline, and common sense,' he concluded.
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