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Business Development Investor behaviour trends in 2017

Investor behaviour trends in 2017

Here are the highlights of the key trends observed in investor behaviour in 2017
Daya Ragunathan Dec 31, 2017

Openness to new financial instruments

The year started after the government’s demonetisation drive. This along with fall in bank interest rates propelled investors to explore other financial instruments to park their money. Tarun Birani of TBNG said that there have been many enquiries from first time investors on financial instruments in 2017. “We have found that investors were more receptive to the idea of investing in financial instruments such as mutual funds. In fact, many investors approached us to enquire how they can start investing in MFs,” he says.

SIP is king

SIPs have been gaining popularity for some time now. In 2017, AMFI data shows that  the MF industry had added about 9.05 lakh SIP accounts each month on an average in FY 2017-18, so far. During FY 16-17, a total amount of Rs.43,921 crore was collected through SIP. The average SIP size of each account is estimated to be around Rs 3,250.

Another healthy development is longevity of these SIPs. Over 55% SIP accounts have been active for more than five years.

Tarun believes that retail investors have taken to SIP because of its convenience.

Return to equity and more investor maturity

AMFI data shows that there has been a sharp rise in equity investments from FY 2016-2017. As on November 2017, equity oriented schemes constitute 38% of the industry’s assets in November 2017, as compared to 31% in November 2016.

Another positive development for the industry is increasing financial awareness. Many investors are ready to stay invested for long term and are not affected by market fluctuations said Mukesh Dedhia of Ghalla & Bhansali Securities. In fact, AMFI data shows that 34% of the industry’s equity assets have stayed invested for more than 2 years.

B15 to reckon with

AMFI data shows that assets from B15 locations have increased from Rs.2.81 lakh crore in November 2016 to Rs.4.10 lakh crore in November 2017. The rate of growth in assets for B15 locations was 46% (34% for the industry as a whole during the same period).

Increase in online transactions

The year also saw an increase in online transactions. More advisors have started facilitating online transactions for their clients. In fact, MF Utility data shows that one third of industry transactions happens online.

Have you noticed any other trends?  Let us know in the comments below

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