The Transition of Investors from Real Estate to Mutual Funds

The investment space in India is currently witnessing a considerable transition with investors switching from the real estate sector to the mutual fund sector. It was not too long ago that the real estate sector was one of the most sought after avenues for investments.

However, the real estate sector is losing its value over the last few years, especially after demonetisation. Also, the return on investment has hit a slump around the country.

The return on investment has always been one of the crucial factors for investors. With the real estate sector generating subpar returns, the market is witnessing a massive transition to other better return generating alternatives such as mutual funds.

The mutual fund industry has witnessed a significant rise in investments, thanks to the extensive awareness around the subject over the years. In a recent report released by the Association of Mutual Funds in India (AMFI), the Indian MF industry experienced a growth of 7.72% from July 2018 to July 2019. The assets managed by the sector also stood at Rs.25.81 trillion.

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Mutual fund investment, which was once perceived to be for the elite alone, has now become an affair for everybody. The transition can be attributed to the various awareness campaigns, coupled with the ease of investing through digitisation.

Mutual fund investment, over the years, has become accessible to everybody with a smartphone. Just a few simple steps to follow and you can start your investment journey at your fingertips. The Asset Management Companies’ (AMC) has also come up with initiatives to allow individuals to start investing with smaller amounts.

The initiative allowed first-time investors who did not have access to lump-sum amounts to participate extensively in the industry. As per AMFI’s data, out of the total individual mutual fund assets managed, close to 23% of them were registered from B30 cities of the country.

With many FinTech players also providing a better investing experience with attractive products and paperless KYC processes, the industry has indeed witnessed an increase in the wealth management space. 

For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in