Rs 10,000 a month in SIP in HDFC Flexi Cap Fund is now worth Rs 15 crore, says HDFC AMC’s Navneet Munot

Over the past few years, India's mutual fund industry has experienced an impressive upsurge in investor engagement. There has been a substantial increase in the industry’s total assets under management (AUM), with a continuous influx of new investors joining in.

On Wednesday, at the Business Today 500 Wealth Creator Summit in Mumbai, a high-powered panel of CEOs discussed the future of Indian markets, exploring emerging trends, challenges, and opportunities that will shape the trajectory for businesses and investors.

Navneet Munot, MD & CEO of HDFC Asset Management and AMFI Chairman, said, "The mutual funds' SIP book today is Rs 17000 crore. Three years ago, it was half of what it is today. It took almost 25 years for the industry to reach a billion dollars a month; after that, in the next three years, we will have doubled it. If we go back to 2017, it was 4,000 crore, then 8,000 crore in 2018, and now 17,000 crore in 2023."

Three to four factors have taken this number to reach this point, but we have a long way to go.

"Funds have delivered around 18–19% CAGR in 25–30 years. For somebody who did a SIP of Rs 10,000 in the HDFC Flexi Cap Fund, the amount today would be around Rs 15 crore. However, that was a different environment in terms of inflation and interest rates, so I cannot bet on a similar story going to repeat in the next 28 years, but it just shows the power of compounding; it shows the potential that India has got, and we believe that more and more people are looking at that track record. Secondly, mutual funds are one of the most transparent financial investment products in India and other parts of the world. Third is technology, which has made it easier and easier for investors to understand this product, transact, invest, and so on and so forth. Lastly, the training and investor education provided by AMFI related to mutual funds and the efforts we put in to spread that word in every corner of the country have played a big role."

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Today, the mutual fund industry has reached Rs 50 lakh crore AUM with only four crore unique investors at the PAN level. This gives the industry more opportunity to grow in the future.

While navigating the market and looking at it over the next 60 months, Sunil Singhania, Founder of Abakkus Asset Manager LLP, said that when the going is good, we all believe it will continue to be good, but at the same time, it will also be consistent with what we are in and where we are heading. "I have been very positive about managing money over the 25-year journey. Things have worked out well for the Indian economy. In the period of 2022–23, the world was debating whether there would be a recession or zero per cent growth. In India, we debated whether we would have 6 per cent growth or 7 per cent growth, and we grew at 7.6 per cent this year. Corporate profits have been up year-over-year by 30-35 per cent; even in the next two-three years, earning growth is looking like 15–16%," said Singhania.