India has traditionally been a country of savers, but when it comes to investments, traditional investment products as well as physical investments are used to capture the lion’s share in such savings. With physical assets like real estate requiring big-ticket investments, investment portfolios used to skew toward this single asset class. In addition, with the eternal love for the yellow metal, gold occupied another place mainly in the shape of gold ornaments and ornaments. Thus, historically Indians were inclined towards saving material wealth.

Also, lack of awareness and knowledge restricted investment options to Bank FD, LIC, PPF, KVP, NSC, etc.

However, as we are witnessing some major policy and reforms like demonetisation, GST, RERA, banking consolidation, falling interest rate scenario as well as disruptive changes in the post covid trend such as the culture of adoption of rental services ( UBER, AIR BNB, etc.) and changing. The buying habits of goods and services with pacing technology and digitalization (Amazon, Paytm, Swiggy) has brought a paradigm shift in the minds of investors from investing in physical assets to focus on financial assets. Moreover, with each changing generation, the importance of liquid and fast moving assets has increased as the younger generation is more comfortable dealing in financial savings then buying physical assets such as property or metals.

Unlike limited options like LIC, PPF, KVP, FD&RD, etc., investors are now spoiled for choice. Mutual funds have brought about a revolutionary change in the options available to meet various financial goals, ranging from short term to long term goals. . As a result, retail investors are also showing an increasing preference towards mutual funds to create long-term assets. Moreover, young and tech-friendly investors have explored investing in stock platforms like Zerodha, Upstox, Grow, Small Case Model Portfolio, Cryptocurrencies, etc.

While equity, debt, commodities and real estate markets have been experiencing cyclical movements and have been volatile, mutual funds have been the preferred choice, given the benefits of professional fund management for the money invested. Continuous level of monthly SIP inflows approx. 8,000 crore over the past few months, reflecting the sentiment of mature investment behavior among retail investors, despite continued volatility in the stock markets. Informative campaigns like Mutual Fund Sahi Hai have helped in raising awareness about mutual funds as a suitable investment. Vehicles to achieve various financial goals.

This is also reflected in the growth of the mutual fund industry, as the overall assets under management (AUM) for the sector has increased manifold over the past decade, showing an increase from Rs. 4 lakh crore in March 2009. Around. 37.41 lakh crore till September 2021. When it comes to investments by retail investors, the data has been more impressive, especially in the last 5 years. The AUM of individual investors has also outperformed the investments made by the institutional segment during this period. As of September 2021, MF registered approx. 11.17 crore separate folios and 10 crore+ SIP book reflect the depth of Indian retail investors.

Mutual fund inflows have not only helped investors but also strengthened the mutual fund industry at the backend, as regular healthy inflows have helped the markets to sustain the adverse impact of FII outflows.

Also with features like SIP, STP and SWP, mutual funds not only motivate investors to plan their investments but also ensure to meet their short term, mid term and long term financial goals. They can also do their own risk assessment. Investing and investing in suitable Mutual Fund schemes that can provide investors with risk adjusted rewards along with the much needed margin of safety and liquidity.

Today, investors can invest in different disciplines depending on changing market dynamics and economic activities to reduce risk and give their portfolio a highly qualified diversification across asset classes, sectors, geographies and disciplines. Mutual funds provide an opportunity to invest in fixed income, bonds. (government and private), sectors, commodities, etc.

With the advancement in technology, investors can start investing with the ease of online platforms and can monitor their investments on a real time basis.

In the coming years, India is going to witness a massive change with the changing mindset of the people from savers to investors.

Views are personal: The author is Vishesh Gandhi, Founder – MMW Financial Services LLP

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