Equities remained 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, says Madhu Nair
| Photo Credit: Special Arrangement
India’s mutual fund industry may reach ₹400 lakh crore by 2035, growing at 16 to 18% CAGR from ₹75 lakh crore currently, forecast Madhu Nair, Managing Director, Union Mutual Fund, here on Thursday.
The industry’s assets under management (AUM) stood at ₹75 lakh crore as on July 31, 2025, and the industry would be growing to ₹400 lakh crore, in next 10 years, at a pace of 16 to 18% CAGR, he said while addressing a media conference held in connection with the launch of a new mutual fund product, Union Diversified Equity All Cap Active Fund of Funds.
“The rule of 72 tells us that at 18%, assets double every four years,’‘ he asserted adding, strong economic fundamentals, increased investor participation, and a growing savings culture, and India’s GDP growth would drive this growth.
“India’s GDP is expected to grow at 6–6.5%, with inflation around 4–4.5%. This will give us a GDP growth of 11%. Traditionally, a well-run fund delivers a growth slightly above this, at say, 12–14%. But again, it can’t be a straight line, some years may be slow, or negative, while other times can bring in 20–25% growth, thereby on an average a significant growth,’‘ Mr. Nair explained.
Commenting on investment trends, he said equities remained 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.
For instance, he said, RBI has doubled its gold allocation from 6% to 12% in two years. Globally, central banks’ gold purchases have tripled. With rising demand under a constrained supply scenario, the demand for gold would rise and it would continue to remain one of the crucial portfolios.
Mr. Nair also said India was on a super growth cycle, Japan saw a similar boom phase between 1970 and 1990, the U.S. between 1980 and 2010, and China between 2000 and 2020. “India is now in its high-growth phase, and disciplined investors who are willing to remain invested for longer years stand to create intergenerational wealth. And, our young people should party less and save more, so that when they are 35- 40 year old, they can party more,’‘ he advised.
Quoting a report, Mr. Nair said, despite a surge in retail participation, equity penetration in India remained modest at around 8%, significantly lower than countries like China (15-20%), the U.S. (45-50%) and Japan (55-53%).
Published – August 21, 2025 09:49 pm IST
