“Volatility is greatest at turning points, diminishing as a new trend becomes established.” billionaire investor and philanthropist George Soros once said. The quote is apt for the situation we are in – on one side, the pandemic has caused economic losses, but on the other, the financial markets have seen a sharp upside. It is against this backdrop that CRISIL held its first ‘India Investment Research Conclave’ to celebrate the completion of 20 years of CRISIL Mutual Fund Ranking (CMFR) and discuss the growth of wealth management industry in the country.
The webinar had the who’s who of the mutual fund and wealth management industry as part of a star studded panel (details in postscript), and the discussions that followed were insightful and engaging. The event also had Ashu Suyash, CEO and MD, CRISIL, present her views on the future of the capital and mutual fund market, while Nagarajan Narasimhan, Senior Director and Business Head, CRISIL Research, spoke about what has gone into making CMFR the veritable beacon it has been for mutual fund research in the country.
There was consensus among the panelists that the mutual fund industry in India has a bright future and will scale up significantly from here, riding on a strong regulatory framework and close linkages built with its distributor network over the years. It can potentially cater to 250 million customers, up from 25 million today. The potential is underlined by the unhindered surge in money flow through the systematic investment plan (SIP) route despite market volatility. In a lighter vein, some even suggest that ‘SIP’ is a more popular term than ‘mutual funds’. CRISIL estimates the industry to cross the Rs 50 lakh crore mark by 2025, from Rs 31 lakh crore as of December 2020, which works out to a compound annual growth rate of ~14%.
The country is also seeing a change in the traditional fixed-income orientation of investment, with investors – especially younger generations – increasingly preferring equity (including direct equity), and high networth individuals (HNIs) gravitating towards alternative assets.
