Indian Mutual Fund Industry Has Grown At An Impressive Rate In Past Few Years: Abhinav Angirish, Investonline.in
What’s your take on SEBI’s recent decision to increase the minimum investment ticket size for a PMS to Rs 50 lakh?
The limit was last changed in 2012 when it increased from ₹5 lakhs to ₹25 lakhs, from 2012 till now the GDP per capita increased by more than 40 per cent, which shows the increased limit is not too high. The limit is increased to let only the serious and well-informed investors to invest through PMS. The move was taken to keep the retail investor away from the concentrated risk of the PMS and to encourage them to take the Mutual Fund way for investing. The move will slow down the growth of the PMS industry, but it will surely increase the Mutual Fund’s AUM. We support SEBI new norms on PMS.
Do you distribute direct or regular plans of Mutual Funds and why?
Investing in Mutual Funds are different from investing in FD, PPF etc. In MF you must have a clear understanding of why and where you are investing. What should be the ideal allocation of investment? Which segment, category and which scheme is good to invest in? These are some of the questions of which not all investors have the answers. A financial advisor would help you to invest better which only happens in regular plans of mutual funds. What if you invest in a mediocre scheme just for the sake of saving the fraction of the cost, the whole concept of investing may be ruined. Direct plans are mainly for either institutional investors or the investors who are well aware of their investing. The retail investor may not know this, which is why he/she requires a financial advisor/regular plan. To help the investor to achieve their goals effectively we distribute regular plans.
Do you think that the current LTCG norms are due for a change, and why?
The exemption limit of ₹1,00,000 should be doubled to ₹2,00,000. Currently, investors are paying LTCG and STT both even when the latter was introduced instead of the former. LTCG rate cut or STT removal may be too much to ask for but an increase in the exemption limit would surely push retail investors back towards the market.
With valuations still hovering around lifetime highs for the NIFTY, is this a good time to go overweight inequities? Or would you recommend a more circumspect play?
Well, this is not the first time the market is at life-time high. In the coming years, we may see many more highs and wonder is there a room for it to anymore higher. An investor is never bothered about levels. Equities have remained undisputed asset class for a century now. I would advise buying quality stocks. They will deliver regardless of market conditions. Investment decisions are not made by looking at levels at which market trade. India has ambitious plans to reach $5 trillion marks, sooner or later, it will happen. India is a big consumption story and the best is yet to come.
As an online player dealing in multiple products, what challenges do you face? How do you build and drive customer engagement?
Indian mutual fund industry has grown by an impressive rate in the past few years, yet there is a need for more awareness especially among tier II and tier III cities. Mutual fund products are often misunderstood by an average investor who draws a quick comparison between stocks and a mutual fund. Goal-based investing takes a backseat while investments are driven purely on the basis of returns. The rigid regulatory framework is also hampering the growth potential of the industry. We are sparing no efforts to educate customer, help him identify his goals and keep in touch through mailers and messaging platforms. We have developed cutting edge technology to make investing simple even for someone who is not well-versed with the complex financial world. We have even launched a mobile app to bring information on fingertips. Customer satisfaction is our top-most priority and our processes are engineered to deliver maximum customer satisfaction.
Lastly, what’s your take on real estate? Are the woes due to continue to do you see the sector reviving over the next few years?
Real Estate sector has been under pressure for quite some time now. It has born the brunt of the slowdown in the economy, but things are looking promising. The government’s bold reforms are expected to continue and this is a huge positive for the long term. I believe the worst is over, and we can see a gradual recovery in the sector. Indian real estate sector is expected to reach $1 trillion by 2030. The development of smart cities coupled with increasing urbanization makes the sector attractive for long term investments. The sector is attracting the attention of private equity and venture capital companies. Institutional investors have pumped in US$ 3.5 billion in 2019 so far. I firmly believe the best is yet to come for the real estate sector.
