INSUBCONTINENT EXCLUSIVE:
ET Intelligence Group: High net worth individuals (HNIs) are gradually shifting away from the equity market, show the latest data from
Association of Mutual Funds of India (AMFI)
According to market trackers, fixed maturity instruments and real estate are back on the radar of these investors.
Monthly investment
through the systematic investment plans (SIPs), which is largely driven by retail investors, has remained constant at around $1billion per
month in the past three months
But, the share of HNI and discretionary inflows in the total domestic equities flow dropped to 39 per cent in the past two months compared
with 55 per cent in the past one year.
The SIP book in March 2018 was at Rs 7,119 crore, while the total inflow was limited to Rs 2,954
It implies that there were outflows of Rs 4,165 crore from the lump sum investment
SIP flow accounted for 87 per cent of the total domestic mutual fund flows of Rs 24,122 crore between March and May, against 42 per cent
contributed by the SIPs in the previous fiscal.
Fixed maturity plans (FMPs) are becoming more lucrative giving interest rates between 8.4
per cent and 8.75 per cent
In May 2018, FMP funds collected nearly Rs 12,000 crore.
FMPs are closed-ended debt mutual fund schemes with a fixed maturity period
These funds try to invest in instruments whose duration is similar to the maturity
This eliminates the risk of interest rate fluctuations.
Another reason for the HNI shift is the rising attractiveness of real estate due to