Problems and Prospects of Mutual Funds in India

Mutual funds have already taken over banks and financial institutions in US, in offering the most optimum returns on a set of diversified portfolios. The trend in India is looking much the same with many mutual fund schemes gaining the confidence of investing populace so much that the public sector banks and financial institutions have started their own mutual funds owing to the fear of global trend. But, this does not mean that mutual funds are full of benefits or virtues. They have their own set of problems regarding costs, services, regulations, profitability, participation, financial instability and others, which have been causing big concern to investors. The growing realisation on such issues is adversely affecting the investors’ stake in mutual funds industry in India. But, fostering economic variables in the country are giving faith for its vividness. The present study is an attempt to examine the factors responsible for this contradictory state of mutual funds in India so as to throw light on its future prospects.