How does the Indian mutual fund industry compare with its counterparts in the developed world?
The mutual fund industry here is still nascent. Everyone, from the investor to the intermediary to the regulator, is going through a learning phase. Even developed markets went through such periods of evolution. In North America, the crash of 1974 was the trigger for increasing professionalism in the mutual fund industry there. Academic principles began to be applied to assessing fund performance, regulators increased the scope and frequency of monitoring, and investor servicing improved. Investor attitude also makes a difference. For instance, investors in the US show a lot of confidence in America Inc. So, in the knowledge that equities hold long-term potential, investors there are willing are willing to put up with short-term volatility. In contrast, Indian investors tend to take a short-term view of the market, completely ignoring the prospects of the corporate sector. The same is the case with other Asian markets such as Taiwan and Hong Kong. Once the market goes through a few mor
