Mutual funds are the best bet for small town investors for participating in the domestic capital market during the current volatility, a top banker said here on Monday."Since the level of investors' awareness and penetration of financial market players is quite low in smaller towns, the mutual fund route is best advised for retail investors," ICICI Prudential Asset Management Company Chief Investment Officer (CIO) Sankaran Naren told Business Standard.
He informed that the Indian mutual fund industry was likely to spend Rs 140 crore towards investors' education and awareness as mandated by the Securities and Exchange Board of India.
"Each company has to set aside 0.02 per cent of their corpus towards investors' education. The composite corpus is to the tune of Rs 140 crore, since the total Asset Under Management (AUM) of all the mutual funds in India is about Rs 7,00,000 crore," he informed.
He said that while it was difficult to predict capital market direction, volatility would be the order of the day in 2013 and would much more than witnessed in 2012.
"Globally, economies are passing through a debt de leveraging cycle. With volatility becoming a reality, investors should seek capitalising on this very trend and mutual funds offer products that are positioned for this purpose only," he added. Investing through Systematic Investment Plan (SIP) into infrastructure has the potential to benefit investors over the long term period, he suggested.