Jan 20, 2024
Join us on Capitalmind Podcast, where we demystify the world of finance without the jargon. In today’s episode, talk about the asset management industry in India and what’s in store for the future.
Now get this - Mutual Funds own only 8% of Indian companies, while retail investors own 9%.
Let’s rewind. In 2005, despite impressive returns, MFs didn’t gain much attention due to high fees and the lack of tax advantages. Fast forward to 2018, capital gains and dividend tax changes sparked a surge in MF investments, increasing their ownership to 8%.
Explore the shift in India’s financial landscape – changing disposable incomes and tax adjustments have made MFs more attractive. The “MF Sahi Hai” mantra and the success of Systematic Investment Plans (SIPs) further contribute to their rise.
Regulatory improvements play a role, but we also discuss other investment vehicles – MFs, Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), and more. Understand the evolving dynamics and where your money might fit best.
We dive into comparing investment vehicles and their equivalents in the US. Spoiler alert: India’s investment culture is rising, embracing the expertise needed to manage money with relatively low costs and instant liquidity.
Is passive investing becoming the norm? Not quite yet. We need more institutional capital for that shift.
We end the episode trying to connect the dots and see what the future of this industry may look like.
References
00:00 Introduction and Disclaimer
01:15 How is the
money divided among different vehicles in the asset management
industry?
06:36 Why do
Mutual Funds have a lower ownership in Indian companies (8%)
compared to retail investors who own 9%?
20:21 What are the
downsides of investing in Gold and Real Estate?
27:40 Are we just
one crash away from everyone turning away from equity?
34:38 Given that
we have a savings culture, will investing grow faster in the
future?
40:42 Which type
of investment is good for whom?
44:53 Mutual Fund
Vs Direct Stock Investing: How are things different in India and
the US?
01:02:46 The
future of the Asset Management industry in India.