- by RingMoney
- 3 min read
Mutual Funds (MFs) industry has started growing at unprecedented rates in recent times with AUMs (Asset Under Management) growing ~5 fold (to INR 26.8 lac crores by 2019 end) over last 10 years. Nearly 3 Crore investors (out of 130 Crore population) are taking advantage of various MFs schemes; SIP (Systematic Investment Plan) contributions have increased at even higher rates. Although the awareness levels of Indian investor regarding financial instruments have increased considerably, the extent of actual investment in growth-oriented instruments line Equities and MFs is considerably lower even today with India’s AUM to GDP ratio of ~12% compared to World Average AUM to GDP ratio of 62% (most developed countries having this ratio north of 50%).
Systematic investment plans (SIPs) have made retail investing more sustainable, protecting investors from market volatility. On an average, 9.55 lacs SIP accounts each month during the FY 2019-20, with an average SIP size of about INR 2,800 per SIP account. SIP continue to be the preferred route for retail investors to invest in a mutual funds as it helps them reduce market timing risk.
Seasoned Indian investor is making a decisive but slow move away from physical assets (gold, property, etc.) to financial savings. Additionally, first time investors find it convenient to invest in traditional instruments (like Fixed Deposits) mostly due to lack of effective/readily available guidance on MF investments, losing out on potentially higher returns. Historical data suggests long term returns from MFs (9%-12% annually) being considerably higher than (5%-8%) returns obtained from traditional financial investments. Indian MF industry has huge potential to bring small investors (from outside Top 30 cities) into investing arena with investment options starting at INR 500.
With the motive to serve Investor needs and impart awareness among untapped Indian investment community for taking informed decisions, RingMoney started its operations last year. RingMoney started educating people not only about goal-based investment decisions to meet financial goals per their risk profile but also guided investors about how to effectively manage financial emergencies. Experiences shared by our clients revealed how they were able to sail through the current financial emergency (arising from COVID-19 pandemic) based on RingMoney’s advise to park a portion of financial portfolio in Emergency Funds/Liquid Financial Instruments.
With this engaging approach towards investors/investment management, RingMoney has become one of the most loved Investment platforms with people increasingly talking about RingRules (Investment principles offered by RingMoney) on most well-known social media platforms. Over a short period of time, RingMoney has grown pan-India with its Clients coming from 20+ states. All this became possible through secure self-help online platform, strong research and recommendation leading to appropriate guidance from RingMoney’s investment advisors. RingMoney’s advisors love talking to Clients to understand their risk profile in detail and then base their recommendations not only on past fund performance but primarily driven by customer risk profile, fund managers performance, sector performance, etc. At appropriate times, we suggest portfolio diversification through international funds with exposure to Global blue-chips like Facebook, Amazon, Netflix, Google, etc. This has enabled RingMoney to come up with Best Mutual Funds for 2020 and 2021.