Markets have remained resilient despite broadly negative returns over two years, supported by monthly SIP inflows, and this resilience could also attract foreign investors as conditions stabilize, said Sid Swaminathan, managing director and chief executive officer, JioBlackRock Asset Management. However, high SIP stoppages and cancellations point to rising investor churn, particularly among those who started investing less than two years ago, raising concerns about investor persistence. “If new investors see the market fall 5-10%, panic and exit, they may never return,” Swaminathan said in an interview.
More than two-thirds of investors who panic-sell during market declines fail to return in time for the recovery, he said. During the covid market cycle, staying invested could have yielded 20%, while selling at the bottom would have resulted in a 30% loss. Buying at the bottom could have generated returns of around 40%. “The outcomes vary significantly, but consistency and staying invested are crucial to long-term wealth creation,” he said. Edited excerpts:
Markets have seen a meaningful reset amid geopolitical uncertainty, elevated crude prices and foreign investor selling. We remain cautiously constructive as we enter the new Samvat year. India’s structural growth story remains compelling, but this is an increasingly differentiated market. That calls for greater selectivity, with a focus on where structural growth, earnings visibility and valuations come together to support sustainable returns.
Absolutely. Until now, much of the industry’s narrative has focused on products: which fund to buy and which one performs best. But with around 55-56 AMCs and 30-40 funds in some categories, there is product fatigue and too much choice for investors.
The focus needs to shift from picking the best-performing fund to understanding its role in an overall portfolio. Investors need to assess how much equity, debt and commodity exposure they need, based on their goals and investment horizon. Linking portfolios to specific outcomes will be the industry’s next frontier, and this shift is already beginning.