A shocking news has emerged regarding mutual funds a few weeks back. Currently, data has displayed that mutual funds do not invest money in about 90% of the companies in the stock market. You must have purchased some mutual fund scheme through SIP as there are a total of 427 active mutual funds schemes in the country. Out of these, 95% of the schemes have invested money in only 382 shares.
If we go through the March analysis reports, Mutual funds reported a participation of only 8.9% of all the registered companies. However when it comes to FII or Retails industries, they carry 19% and 10% of registration. Simultaneously if we go on to calculate the amount being entered, 80% of the mutual funds money passes on to only 178 shares. Talking about sectors, 60% of the amounts gets distributed to only 79 sector.
To break the complexity, we can state that if 4000 companies have their shares in the market, the fund manager picks up only 10% of the shares (400 fixed shares) repetitively. This needs to get modified further to boost our Indian economy and help other 90% made in India companies to flourish.