Are HNIs shying away from making lump sum investments in mutual funds?


by 5paisa Research Team Last Updated: Dec 12, 2022 - 08:12 am 9k Views
Listen icon

India’s stock markets may be testing lifetime highs, but high-net-worth individual (HNI) investors seem to be staying away from putting lump sum money into mutual funds. 

Lump sum inflows into the equity segment, excluding new fund offers (NFOs), stood at Rs 17,900 crore in October, the lowest since November 2020, according to a report by Mint newspaper.

The slowdown has been on account of HNIs waiting for a better entry point as the stock market nears the record high, weakness in inflows from rural customers, and reduced NFO activity in the equity segment, the report said.

Meanwhile, redemptions in the equity segment have been steady.

Redemptions usually gather momentum when there is a sharp rally in the equity market, and the share of equity in the portfolio allocation models of wealth managers rises above certain thresholds based on the customer risk appetite.

A few other trends have also emerged over the past few months.

These include a revival of NFOs in the September quarter after a hiatus, steady trends in overall assets under management of mutual funds, sustained high outflows from the debt segment, and new highs in monthly SIP inflows.

The report also highlighted that HNIs had shown a rising propensity towards investing in the passive segment, driven by the formalization of their investment process as the next generation takes over.

HNIs also prefer to invest in alternative investment funds and portfolio management services as these products have offered relatively better returns in the past couple of years. This is despite the fact that HNIs bear higher costs than mutual funds while investing in these instruments.

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Mukka Proteins IPO Allotment Status

About the Mukka Proteins Ltd IPO The stock of Mukka Proteins Ltd has a face value of ₹1 per share and the price band for the book building IPO has been set in the range of ₹26 to ₹28 per share. The Mukka Proteins IPO will be entirely a fresh issue of shares with no offer for sale (OFS) component. A fresh issue tends to bring in fresh funds into the company, but is also EPS and equity dilutive.

M.V.K. Agro Food Product IPO Allotment Status

Building blocks of the M.V.K. Agro Food Product Ltd IPO The stock of M.V.K. Agro Food Product Ltd has a face value of ₹10 per share and it is a fixed price issue. The price for the book building issue is set at ₹120 per share. Being a fixed price IPO, the question of price discovery does not arise in this case. The M.V.K.

Amazon is set to take on Meesho with its Amazon Bazaar

The battle of the giants in Indian e-commerce is heating up as Amazon is set to challenge local favorites like Meesho and Flipkart's Shopsy with its latest venture, Amazon Bazaar.  In a bid to tap into the burgeoning market of value-conscious consumers, the global giant Amazon is set to disrupt it with its new venture.