The mutual fund industry should not be over confident about continued retail interest in equity if the stock market keeps falling, UBS analyst Gautam Chhaochharia said in a report.
Speaking to BusinessLine, Chhaochharia said: “Retail investors tend to chase historical returns… The one-year returns have now been negative for the last three months and the two-year returns may turn negative by mid-2016 if the markets don’t rally. So, the assumption that local retail inflows into Indian equities have become a structural trend, especially given abysmal returns on gold and property, plus the low exposure of local investors to Indian equities is flawed,” he explained.
