Mutual funds are becoming increasingly popular with investors in India catering to all sections of society. VIKANT SAHAY met with Rohit Singhania, head of equities, DSP BalckRock Mutual Funds to find out more about the mutual fund market in Goa and India
HERALD: How is the mutual fund market doing in India?
ROHIT SINGHANIA: The mutual fund market is doing very well in India. The Assets Under Management (AUM) as on May 31, 2018 stood at Rs 22.60 lakh crore. To put it in context, this AUM has grown at 3x in 5 years and 4.5x in 10 years, which is phenomenal. The total number of accounts (or folios as per mutual fund parlance) as on May 31, 2018 stood at 7.35 crore, while the number of folios under equity, ELSS and balanced schemes, wherein the maximum investment is from retail segment stood at 6.13 crore, as per AMFI data. Even in terms of absolute market levels, in previous years, if foreign institutional investors would pull out of the market, the market would correct significantly. However, since the time of demonetisation in end-2016, we have been seeing more and more inflows into mutual funds (for example SIPs are averaging between Rs 6,000 and Rs 7,000 cr a month), which are actually able to counterbalance the effect of FII outflows, and support the markets.
HERALD: Is Goa a good market for you? Has the mining ban affected the power of buying/investing in Goa?
RS: The Goa market has an AUM of approximately Rs 15,000 crore as on today, so the market is relatively large. It terms of overall growth, the industry has remained stagnant. However equity asset growth has been in excess of 20 per cent in FY 17-18. We have not yet witnessed any slowdown in flows from retail investors, in fact the retail investor base is increasing specially through the SIP mode of investments. Incremental flows from institutional clients have slowed down.
HERALD: What new initiatives has your company taken to attract people from Goa to invest in mutual funds?
RS: AMFI has started the ‘Mutual fund Sahi Hai’ campaign to attract investors to mutual funds. They have branded bus stops and put up hoardings. They have also started advertising on radio channels and visual media. Our company advertises to existing investors through email. We conduct investor awareness programs in schools, offices and wherever we get the opportunity. We also use digital marketing initiatives like facebook, twitter etc to attract new investors.
HERALD: According to the recent UNCTAD report, the FDI into India has dropped. How do you visualize the status of Make in India in this scenario?
RS: Yes, as per recent data, FDI into India seems to have reduced FY18 compared to FY17. However, various Indian government spokespersons have clarified that they continue to see excellent commitments from investors all over the world, and that the actual inflows are merely a timing mismatch issue. Just a one year dip alone cannot be indicative of the status of Make in India, and we will have to see it evolve over a longer period. We will continue to keep a watch on FDI flows.
HERALD: Sensex is close to an all-time high. How does it affect the mutual fund market? Does it give you more space to play?
RS: The Sensex is an index of 30 of the country’s largest stocks by market-capitalisation. The movement of these 30 stocks depends on various factors including domestic news flow, global news flow, liquidity and so on. Hence there is no direct correlation of the Sensex to the current state of the economy. However, what this index at an all-time-high could indicate is that market participants are optimistic on the growth prospects of an aggregation of these 30 stocks going forward. From a mutual fund viewpoint, we do not look at absolute index levels, but rather from a valuation perspective, before making any investment decisions.
