As we enter 2020, MF CEOs expect participation of retail investors in mutual funds to continue to grow, valuations of mid-cap and small-cap stocks to see an uptick and a gradual recovery in GDP growth. Here is their outlook for 2020.
Vishal Kapoor, CEO, IDFC MF
Traditional banking deposits losing sheen to new financial investments (bank deposit share in household saving has come down from 68.9% in FY12 to 53.4% in FY18), hence there is a huge scope for debt MFs to grow
Valuation of the broader market is at all-time low; hence 2020 could see an upside in the equity market with focus on mid and small cap category
Increased participation by individual (retail + HNI) investors (48% in FY14 to 58% in FY19) with SIP continuing to be one of the preferred mode of investments for the retail investor
Swarup Mohanty, CEO, Mirae Asset MF
Large cap companies will continue to dominate the equity markets for at least the first half of 2020
Well run and quality mid cap companies with good balance sheet and cash flows are likely to outperform in 2020
GDP is likely to recover gradually in the year 2020 given the lower base of 2019
Ashwani Bhatia, CEO and MD, SBI MF
We expect to see higher retail investor participation. Currently the data indicates that retail participation is skewed towards equity-oriented schemes. With the investor education initiatives underway, we hope to see retail investors participating in other categories as well. With increasing investor confidence, retail flows in debt funds should touch higher peaks.
Majority of the people still believe that mutual funds are only suitable for long-term investing. As a fund house, we are working towards making investors aware that mutual funds can also help investors achieve their goals across time-frames. We hope to see a change in trend with increased adoption of mutual funds for liquidity management and short-term goals
The industry has gone through some challenging times in the recent past such as the credit crisis of the NBFC sector which had a spill-over effect on debt mutual funds. While this made investors wary about these products, what was encouraging this time was that investors did not altogether stay away from these products. Investors were concerned about the scheme performance and asked relevant questions to understand the crisis better, but we did not see them press the panic button to exit investments altogether. Going forward, we expect this investor behavior to continue as each crisis brings with it new experiences which investors can learn from.
