The Hindu Business Line : `Mutual funds must work on attracting household sector'

THE Chairman of Canbank Investment Management Services (CIMS) Ltd, Dr N.K. Thingalaya, has said that attention should be given to attract household sector to invest in mutual funds.

Delivering the keynote address at an investor awareness meet organised by Canbank Mutual Fund in Mangalore, he said that the household sector, which is a major source of investment in the country, invested around Rs 4.17 lakh crore in the last fiscal in various areas.

Of this, bank deposits got a major share of 42.9 per cent.

This was followed by contractual investment options such as provident fund and insurance polices at 27.9 per cent, Government bonds at 17.7 per cent, shares and debentures at 1.4 per cent, and mutual funds at 1.1 per cent.

Of the total amount, the sector kept 10.1 per cent with itself in the form of currency.

"Mutual funds should concentrate on tapping this 10.1 per cent, which will contribute significantly to their growth," he said.

In his address, Mr R.K. Madhukar, General Manager of Canara Bank, Mangalore Circle, said that there have been changes in investment scenario in the country in the past decade.

"Today, the investor has abundant options to invest compared to 15 years ago. Most people opted for bank deposits then, as rate of interest was higher.

"As the depositors were assured of their interest, they did not bother to track the investment."

In the changed scenario, the investor has to be active.

"The current products call for active tracking of investments."

Stating that banks have a prominent role to play in promoting investment options such as mutual funds, he said that banks should become financial centres of financial products.

Mr N.R. Ramanujam, Managing Director of CIMS Ltd, who spoke on `Mutual funds: an emerging investment option', said that aspects such as safety, returns, and liquidity drive people to invest.

"The investor should define his risk-taking ability and investment horizons while investing in mutual funds."

Giving an overview of Canbank Mutual Fund, he said it provides 12 open-ended schemes to investors.

Around two lakh investors have invested in these schemes.

Earlier in the day, Dr Thingalaya inaugurated the new premises of the investor relation centre of Canbank Mutual Fund in the city.

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