Listen to this article
The MF industry touched an all-time high AUM when it crossed the Rs. 40 lakh crore mark in 2022. Besides, it also touched new highs across key data points like SIP contribution, SIP AUM, and SIP accounts amongst others.
But, will this momentum continue in the new year too?
Let’s see what the experts believe 2023 has in store for the industry.
Akhil Chaturvedi, Chief Business Officer, Motilal Oswal MF
Upcoming trends - The uptrend in SIP flows is expected to continue gradually. There will be more launches of unique passive funds and increased traction of debt funds. AMFI’s campaign to encourage people to join as distributors would also again speed and will be a catalyst for the industry. Further, wider retail participation and deeper distribution strength would be a force multiplier over time.
Advice for MFDs/RIAs: There is a huge runway for growth for MFDs and RIAs over this decade. In line with the 80-20 rule, 20% MFDs/RIAs handle 80% of the AUM (Rs. 24 lakh crore as against Rs. 1.5 lakh crore for the bottom 80%). If MFDs/RIAs can move from the bottom 80% to the top 20% in 2030, this can lead to a 100x increase in their AUM and revenue potential.
G Pradeepkumar, CEO, Union MF
Upcoming trends - The influx of retail investors, especially through SIPs should continue. Also, we expect robust FPI interest. However, given the looming macroeconomic uncertainties, any significant correction/consolidation of the equity market could affect retail investors’ interest. The industry needs to take steps to educate investors on staying invested for the long term.
Another key trend could be investors' inclination towards long-term debt funds as the interest rate cycle is expected to peak in another two to three years.
Advice for MFDs/RIAs - There has been a significant proliferation of finfluencers that has increased DIY investing. Keep an eye on this and continue demonstrating how advisory and distribution intermediation contribute significant value.
Gaurab Parija, Head - Sales & Marketing, IDFC MF
Upcoming trends - More MFDs are likely to join the industry under AMFI’s sandbox program. Also, individuals’ interest to participate in the India growth story is likely to accelerate target maturity plans.
Further, going forward as rates normalize and growth impulses reduce, the macro environment will increasingly be more challenging for high-risk assets. Asset allocation will once again take centre stage.
Advice for MFDs/RIAs - There is an urgent need to acquire new-age clients. Also, leverage technology to scale and acquire skills to add value for investors.
Kailash Kulkarni, Co-CEO, HSBC Mutual Fund
Upcoming trends - 2023 is likely to be a great year. India has managed to overcome various inflationary pressures and we expect it to emerge stronger as compared to the rest of the world. Also, though volatility will continue, markets are likely to be buoyant.
On the fixed income side, there could be a topping of the interest rate scenario. Thus, both asset classes should work in the new year.
Advice for MFDs/RIAs - Stay focused and be mindful of the basics. Also, towards the middle of the year, duration funds may see significant inflows.
Nilesh Shah, MD & CEO, Kotak MF
Upcoming trends - The outlook remains cautiously optimistic. Global growth scenario looks very gloomy because of fiscal and monetary tightening. Also, equity markets are likely to be very volatile. Returns would probably be similar to debt funds and not significantly different like in 2022. But it will provide an opportunity to invest in the market from a long-term point of view.
Advice for MFDs/RIAs - Instead of watching out for events, watch out for your reaction to these events and know how to capture them in portfolios.
