Half of retail equity assets stays invested for over 2 years

Close to half of retail equity assets stays invested for over 2 years. Of the total Rs.3.70 lakh crore of retail equity assets, Rs.1.80 lakh crore of retail equity assets stayed put for more than two years as on March 2020, shows the age-wise analysis of MF assets .

The proportion of retail equity AUM that stayed invested for more than two years increased in the last one year from 41.7% to 48.7%, an increase of 7%.

Pratibha Girish of Finwise Personal Finance Advisors attributes this to increasing maturity of investors. She said, “The fact that half of retail equity assets has remained invested for over two years indicates that investors have understood equity funds can beat other asset classes in the long run. In fact, they have seen how so many investors have achieved their financial goals by remaining invested in equity funds for long term.”

Jaipur distributor Ashish Modani of SLA Financial Solutions points out that this is largely due to TINA (There is no alternative) effect. “Most asset classes have not performed well for quite some time. In such a scenario, many investors see equity funds as a better alternative to other asset classes.”

AMFI data further shows that 24% of total retail equity assets remained invested between 1 and 2 year period. In FY 2018-19, 23% of retail equity assets stayed put for 1-2 year.

Proportion of equity assets that stay invested as on March 2020:

 Proportion of equity assets that stay invested as on March 2019: