Nippon Life India Asset Management Ltd. is seeing a slowdown in the mutual fund industry as market volatility weighs on investor sentiment and prompts some high-net-worth investors to move away from large-cap stocks towards specialised investment funds and alternative assets, its management said.
“There is a slowdown in the industry, for sure,” management said on a post-earnings analyst call, adding that growth in the investor base had largely flattened amid volatile markets and weaker mutual fund flows. The asset manager has also seen some moderation in its investor base because of market conditions.
Investors have increasingly turned to specialised investment funds, alternative assets and direct bonds, particularly as mutual fund portfolio returns have remained subdued over one- to two-year periods, management said.
Management cautioned that systematic investment plans (SIPs) could become vulnerable if investors see negative returns over the long term.
To curb investor outflows, the company is taking digital initiatives aimed at encouraging long-term investment behaviour, management said.
The company also reported a one-time cost of ₹96.76 crore due to a reversal of management fees.
On product plans, Nippon Life AMC said it would launch an infrastructure debt fund when market conditions were appropriate.
Management also said the Securities and Exchange Board of India’s new regulations for portfolio management services (PMS) would help expand the market.