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Retail Indian Investors Back to Share Market via Mutual Funds

July 14, 2015

Indian Mutual FundsThe Retail Indian Investors is back into the Share Market after a gap of 6 years after their tryst with Real estate & Gold appeared to have given lesser returns than the Equities.

Increased participation of retail investors through Mutual Funds [MF] rather than direct equity purchases is an encouraging development as it is the Fund Managers job to manage your Hard Earned money at a cost of say around 2% which is worth it. Didn’t we tell you to Invest through Dedicated Mutual Funds 10 Years ago ? Net inflows into domestic equity MFs amounting to Rs329bn (US$5.2bn), up 3.5x YoY [3.5 Times i.e 350%] and up 60% QoQ, have been exceptionally strong in the Apr- Jun-15 quarter. This was on top of net inflow of Rs710bn in FY15, by far the highest ever annual inflow and 76% of the cumulative inflow in the previous 13 years.

Domestic Investors [MF & Insurance Companies] Vs Foreign Investors Interest in Indian Equity
Cumulative equity holding of domestic MFs, currently valued at $58bn, is a fraction of the current cumulative holding of FIIs, which is currently valued at $306bn. Including insurance companies, total holding of DIIs is currently valued at $137bn. DIIs currently own 11.7% stake in BSE100, nearly half of the 23.1% stake held by FIIs.

Indian mutual fund (MF) industry remains vastly underpenetrated with AUM of only Rs12tn (US$190bn) versus bank deposits of Rs88tn ($1,386bn). Take a SIP by SIP approach to stay Invested in Mutual Funds.

It is never too late. Look at How SIP In mutual Funds Work and the astronomical returns they have delivered. HDFC Fund is taken for illustration purpose here. We will shortly publish such report on 100 Mutual Funds for you to choose and build your wealth.

Do Not use Insurance Products for Investments. Insure your Risk Separately via 100% Insurance Products and do not look for investment in the same.

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