Trends
Name : Hitesh Pant Age : 35 Location : Bathinda Investment Rationale : Creating a fund for his daughter ’ s education when she turns 17 ; is prepared to stay invested in equities over the long term .
Not Just Equities
While equity mutual fund SIPs feature in the list of most-discussed topics , debt funds ’ legion of loyalists too has grown in size ( See : AUM ’ s Ascent ). “ A lot of money is also coming into debt funds . With FD rates hovering around 6 per cent , many are moving towards debt mutual funds ,” says Sikka . Jivrajani ’ s experience with his clients sounds similar . “ Investors are not making blanket investments in equities . Given that bank deposit rates are down , they realise that debt mutual funds will offer better returns ,” he explains .
Photo : Kulbir beera
Kunal Bajaj Founder and CEO , Clearfunds
Language is not a barrier in smaller cities , as people are conversant with English as the language of transactions . The next level to be unlocked would be region-specific communication channels .
maturity of investors coupled with a sizeable SIP book should result in investors staying put ,” says Kaustubh Belapurkar , director-manager research , Morningstar India .
Pankaj Mathpal CEO , Optima Money Managers
While small town investors are aware of the risks , they would do well to shun the greed that typically takes root during a bull run .
A Note of Caution
Clearly , smaller cities ’ share in the industry ’ s AUM has seen an expansion , but they have a long way to go before they make a noticeable dent in the larger cities ’ dominant position . “ Large cities will continue to play a pivotal role in the overall industry . Incremental wealth creation in large cities will continue to remain strong ,” says Mehta . Bajaj echoes his sentiments . “ The interest has grown , but bulk of the business is still sourced from larger cities ,” he points out . Also , it is tempting to believe that retail investors across cities have matured into seasoned equity investors mindful of the riskreward trade-off , but their resolve can be truly tested only during a market collapse . “ While small town investors are aware of the risks , they would do well to shun the greed that typically takes root during a bull run ,” cautions Pankaj Mathpal , CEO , Optima Money Managers . Bear your risk appetite in mind instead of blindly investing in schemes that yields eye-catching returns . “ Start with less-risky schemes like large-cap equity funds and balanced funds rather than small and mid-cap equity funds ,” advises Mathpal . Finally , ensure that you link your investments to goals , identify schemes that have a reliable track record and commit to equities only if you are willing to stay invested over a period of at least five to seven years .
preeti . kulkarni @ outlookindia . com
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Outlook Money December 2017 www . outlookmoney . com