Because they also handle market volatility, she argued that the premium such equity holdings offer over usual fixed deposits (FDs) comes. A systematic investment plan (SIP) held for 10 years has never delivered a bad outcome for investors, Edelweiss Mutual Fund MD and CEO Radhika Gupta said at the NDTV Profit Ignite summit in Mumbai on Wednesday.
Radhika Gupta also said India will have 100 asset management companies (AMCs) “sooner than later”. She said the mutual fund industry has room for many business models as new players enter a market once expected to consolidate.
“Finally, you’re investing in India, you’re investing in Indian companies, earnings growth is not bad… Yes, the external environment is painful. You get it to bear the volatility,” she added as part of a panel discussion. She was asked how India’s mutual fund industry compares with the US asset management market. She added, “So I don’t think there needs to be one right model of asset management. “I am so excited about the energy that there is around new entrants. The space is consolidating; the large will get larger,” she asserted. “One of the advantages of this digital age is information on what everyone is doing is available to everyone.
But you get 4 or 5 per cent over FD, not for free. “I remember in 2017… the narrative was ‘why is anyone new even bothering? At the same event, Securities and Exchange Board of India (SEBI) chairman Tuhin Kanta Pandey noted that direct plans will be the default option on AMC digital platforms from November 1. He cited a SEBI survey that found 63 per cent of households knew of at least one securities market product, but only around 9.5 per cent participated in the market.
“A 10-year SIP has never been bad for everyone,” Gupta said. Gupta also said India will have 100 asset management companies (AMCs) “sooner than later”. She said the mutual fund industry has room for many business models as new players enter a market once expected to consolidate. Gupta said markets such as the US and China support a wide range of fund houses, from full-service giants to niche specialists. “If you look at the US, if you look at a market like China, there are hundreds of asset managers, and there are people who I would call Walmarts and supermarkets who do everything, and then there are people who are boutiques with deep specialities, and then there are people who are passive guys, and then there are people, you know, like ARK, who are only innovation experts,” she said. Gupta said sentiment towards new entrants in India had reversed over the past decade. She said easy access to information had levelled the field for newer fund houses. So if you have a good consumer product, if you know how to manage money well, if you have the right proposition, nothing can stop you from growing,” Gupta said. He said investors choosing regular plans should be informed of their higher expense ratio.
