India has traditionally been a nation of savers, but when it came to investing, physical investments along with traditional investment products used to capture the lion’s share in such savings.With physical assets like real estate requiring big-ticket investments, the investment portfolio used to be skewed towards this single asset class.Further,with eternal love towards yellow metal,Gold occupied another space primarily in the shape of gold jewellery and ornaments. Thus, historically Indian were skewed towards Physical Assets Savings.

Further, lack of awareness and knowledge kept investment options limited to Bank FDs, LICs, PPF, KVPs, NSC, etc

However, as we are witnessing some key policy and reforms like Demonetisation, GST, RERA, Banking Consolidation bundled with falling interest rate scenario along with post Covid disruptive changes in trend like culture of adopting Rental services (UBER, AIR BNB, etc) and changing habits of purchases of goods and services with pacing technology and digitalization (Amazon, Paytm, Swiggy) has brought a paradigm shift in mind-sets of investors to shift their focus from investments in Physical Assets to Financial Assets.Further,with each changing generation, importance of liquid and fast moving assets have increased as younger generations are more comfortable to deal in Financial Savings then Physical Assets like buying property or metals.

Investors have now been getting spoilt for choice, unlike having limited options like LIC, PPF, KVP, FDs & RDs, etc. Mutual Funds itself has brought a revolutionary change in options available for catering towards various Financial goals from Short Term to Long Term goals. As a result, retail investors are also steadily reflecting an increasing preference towards mutual funds to create long-term wealth. Further,young and tech friendly investors have explored investments in stock platforms like Zeroadha, Upstox, Groww, Small Case Model Portfolio’s, Cryptocurrencies, etc.

While equity, debt, commodities and real estate markets experiencing cyclic movements and stayed volatile,mutual funds have been the preferred choice, given the benefit of professional fund management for the money invested.The sustained level of monthly SIP inflows approx. above Rs. 8,000 crores since past few months, inspite of continuing volatility in the stock markets, is reflecting a sense of matured investing behaviour amongst retailed investors.Informational campaigns like Mutual Funds Sahi Hai have further helped the cause of increasing awareness of mutual funds as a suitable investment vehicle for achieving various financial goals.

This is also getting reflected in the growth of mutual fund industry,as the overall assets under management (AUM) for the sector multifold over the last decade,showing an increase from Rs. 4 lakh crores in March 2009 to Rs. Approx. 37.41 lakh crores as on September 2021.When it comes to investments by retail investors,the data has been more impressive,especially over the last 5 years. This period has seen the AUM of individual investors even surpass the investments by the institutional segment. As on September 2021, MF registered approx. 11.17 Crore distinct Folios and 10 Crore + SIP book showcasing the depth of Indian Retail investors.

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

Further with features like SIPs, STPs and SWPs, Mutual Funds have not only pampered the investors to plan their investments the way they desire,but also ensures to meet their short term, mid term and long term financial goals.They can also assess their risk appetite and make investments in suitable Mutual Fund schemes that can offer risk adjusted rewards to investors with much required Margin of Safety and Liquidity.

Today, investors can invest their money in different themes basis changing market dynamics and economic activities to mitigate the risk and give their portfolio a much deserving diversification across asset classes,sectors, geography and themes.Mutual Fund offers opportunity to invest in Fixed Incomes, Bonds (Govt & Pvt), Sectors, Commodities,etc.

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

In coming years, India is going to witness massive turnaround with changing people’s mindset from SAVERS to INVESTORS.

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

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