MFs Growing; Face Shortage Of Advisors

Digital initiatives spur growth:

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Investors now understand the benefits of compounding investments with a long-time horizon and value averaging. There is a growing awareness that equity is a better asset class to deal with inflation and generate returns in the long term. According to Manish Mehta, head, Sales & Distribution Alliances, Kotak Mahindra Asset Management, the biggest shift in investor mentality is the move from physical assets like real estate and gold to financial assets. “With lowering interest rates, mutual funds have emerged as a good choice for long term investments. The recent findings of Foundation of Independent Financial Advisors (FIFA) echo similar sentiments and reason the need for advisory, which is under-penetrated,” says he.

5 LAKH FOLIOS M/M

The shift from physical savings to financial savings is a big trend. Recent reports suggest that individual wealth in financial assets grew around 14% in FY17 and one of the major growth drivers have been mutual funds, which clocked an encouraging growth rate of over 35%. Explains Mehta: “This can be attributed to the buoyant equity market and increased contribution from retail investors. The industry has been adding over 5 lakh folios month on month (m/m). The SIP input value has already reached `60 bn. We believe this trend will continue as more and more new investors experience the benefits of mutual funds. Kotak Mutual Fund has also been a beneficiary of this trend.”