India, Indonesia Mutual Fund Markets Share Similar Traits

Global analytics firm Cerulli Associates notes that there are several similarities in the mutual fund industries of Indonesia and India, ranging from their expansive and diverse geographies and cultures, to low mutual fund penetration rates and similar regulatory motivations to develop their respective industries.

In May this year, Cerulli collaborated with leading online survey panel company in Asia, AIP Corporation, to carry out a survey to chart the fund buying journey of over 70,000 individuals in Asia. The survey covered 11 countries including, China, Hong Kong, Indonesia, India, Japan, Korea, Malaysia, Philippines, Singapore, Thailand, and Taiwan.

The key findings for Indonesia and India highlight that they share several important traits. In terms of mutual fund penetration, about 65% of retail investors polled in Indonesia do not own mutual funds, while 46% in India do not own mutual funds. The combined number of investors in the two countries polled was just under 12,300.

Among those who have invested in mutual funds, equity funds are the most important mutual fund assets held by both Indonesia and Indian investors. While in Indonesia, exposure to other types of funds is not widespread, Indian investors seem to be more mutual fund-savvy. In India, it is more likely that investors that have equity funds would have also bought bond funds or multi-asset funds.

Further, showing their conservative nature, a large proportion of mutual fund investors in Indonesia and India rate capital protection and having a clear investment target highly as fund features. However, the biggest percentage of survey respondents in India, 71%, noted regular income/dividend payouts as an important fund feature.

In terms of the discovery stage of the fund buying process, print media, television, and radio are less important as touch points in both countries, while about 41% of investors in both Indonesia and India refer to websites or general financial websites.

Having a digital presence is crucial and influential for asset managers when investors are at the discovery stage of the fund buying journey. When investors have yet to shortlist the funds they are planning to invest into, websites will be the most common channel for them to gather information.





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