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Suresh Soni, CEO of Baroda BNP Paribas Mutual Fund, believes that India’s mutual fund industry is still in its early stages of growth and has immense untapped potential. Speaking about the road ahead, he emphasized the need for close collaboration between the mutual fund industry, distributors and regulators to democratize investing across the country.
Mutual Funds: Just scratching the surface
Soni said, today, the mutual fund industry serves a base of around 5 crore investors. That may seem significant but in a country of 140 crore people, it shows that we’ve barely scratched the surface.
Currently, only 3%–4% of India’s population invests in mutual funds, signaling both a challenge and an opportunity. Baroda BNP Paribas MF is responding by strengthening its presence in the retail segment and building an internal ecosystem that supports meaningful partnerships with distributors.
MFDs: Champions of long-term wealth creation
Soni lauded MFDs for their critical role in developing a SIP culture across the country. He said that the MFDs are working tirelessly to inculcate a long-term mindset among investors. This not only fosters sustained industry growth but also builds lasting investor relationships.
He emphasized that investor education and emotional hand-holding are essential, especially during periods of market volatility. MFDs are often the reason investors stay the course. They are instrumental in ensuring that clients don’t react impulsively to short-term market movements.
Why time in the market matters rather than timing the market
He said that everything that money can buy provides instant gratification—except investing. With investments, gratification is delayed. That’s why it’s vital to help investors understand the value of patience and long-term planning while making financial decisions.
He cited a 20-year market study which shows that there were 13 instances where the market witnessed a more than 10% fall after a period of upward movement:
- In these 13 instances of a 10% market fall, 11 saw positive returns within a year
- In 9 of those 11 instances, returns were in double digits
- In all cases, markets delivered positive returns within three years of a decline
He highlighted that these data points reinforce the timeless principle: Time in the market beats timing the market.
Building for the future
Soni also encouraged MFDs to look at their own businesses through the lens of compounding. He said that the MFDs tell their clients about the power of compounding—but their own businesses follow the same principle.
In the early years, MFDs need to put in extra effort. But as investor experience grows, it creates a self-sustaining growth engine. This is a rare business where your growth is aligned perfectly with your clients’ success. And if that alignment continues, the future will likely surprise you positively.
You can watch his entire interview by clicking here.
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