Feroze Azeez, CEO Anand Rathi Wealth, is an experienced name in the world of administration and money investments. In an interaction with Bachelor of Law. briefcaseConversations about fears around small capitalization investments, the falls of the HNI behavior duration, asset allocation and points to the potentially long participation track for capital participation among investors in India. Edited experiences:
What does recent groups in some sectors about retail investors leading to small capitalization funds significantly, with concerns expressed about the reward of risk-reompensses? What would be your advice for investors?
Retail investors have moved towards small capitalization funds for greater growth potential in their portfolio.
Small capitalization funds have a total AUM (as in February 2025) or ₹ 2.7 Lakh Crore, which is less than 10 percent of the total mutual fund of capital (around ₹ 27.4 Lakh million rupees). Around the last years, the average monthly tickets in small capitalization funds have typically been around ₹ 3,000 million rupees (approximately 10 percent of the total tickets in mutual capital funds). Although they seem to be perceived as risky, the active funds in space have a beta of less than 1 and, therefore, are less sensitive to the movements of the market than expected. Approximately five -year long -term horizons, it has been observed that small CAPS have even surpassed large and medium tapas.
It is the nature of the small capitalization to deliver greater yields, but it takes much longer to reverse after market corrections. The average recovery time in the last three years after market corrections has been more than a year.
Therefore, for an investor, having an exhibition of 20 to 25 percent of small capitalization in the capital of the portfolio of one would be the ideal assignment.
You deal mainly with HNIS and UHNIS as your customers. How different is your behavior towards investments in general and especially periods of reduction reduction (such as Treing March 2020, June 2022, September 2024-March 2025, etc.), compared to regular retail investors?
Customers with an investment strategy and clear objectives are better equipped to handle their return and risk expectations, maintaining calm the volatile phases. This has observed the leg more with HNIS and UHNI customers, since they also have professional financial advisors to administer their portfolios.
The percentage corrections of two digits in capital markets are quite common. Such usual reductions the last seven and eight months, after which the markets tend to recover. Investors with long -term objectives are less affected by short -term volatility as they remain invested and do not panic. Instead, they see corrections as opportunities to rebalance or fill the assignment gaps.
While SIP flows have remained stable, there is the question of SIP strikes in recent months. Do you think this is temporary or is there a cause of the group?
SIP cancellations occur for several reasons, including redemption of funds due to the scope of the goal, switches and STP. Therefore, focusing solely on the detention relationship can be misleading. The net tickets of SIP, which stood at ₹ 25,999 million rupees in February 2025, marked a 35 percent growth of ₹ 19,187 million rupees last year. This net input number is the main indicator when we are looking at SIPS, and despite a higher detention relationship, the general participation of SIP investors remained strong.
Another important point to keep in mind is that most of these cancellations have begun to reach direct mutual funds that represent that investors who invest on their own without establishing an investment strategy tend to get more nervous. In the future, we only hope that SIP’s participation will be strengthened, since Sebi is taking active initiatives to involve more investors in the capital market through this way.
Since much of the interest in the subsequent market has focused on the equipment, has it become a lower tract option? Moreover, after the elimination of indexation benefits and complete taxes? Is this risk too much investor wallets in favor of shares without balance debt options?
After the elimination of debt indexation and tax changes, debt has become a relatively less attractive option for investors. However, Indian households are still invested to a large extent, with almost 60 percent of their financial assets invested in debts or instruments similar to debt. Therefore, to urge Indian investors to look for investment roads that exceed inflation, capital received a favorable position.
Investors should seek a combination of capital and debt in the correct proportions, since they have a low correlation with each other and provide benefits of portfolio diversification. The ideal long -term allocation would be 80:20 in capital and debt, 70:30 for medium term and 100 percent debit in case of short term. Investors should avoid excessive concentration in any kind of assets and their portfolios must be regularly rebuilt.
What is your opinion in the talk about mutual funds (SIPS) that highlights bank deposits flows? Bank deposits have grown by 11 percent annually during the last five years, while Mutual Fund Aum has increased to 19 percent (February 2025).
Aunque la proporción de fondos mutuos de capital y capital ha aumentado significativamente entre 2014 y 2024, de una participación combinada en los activos financieros generales o 5.3 por ciento en marzo de 2014 a 16.4 por ciento en septiembre de 2024, hogares indios Que todavía es similar similar a una forma similar similar a una similar similar a una similar similar a una similar similar a una similar similar a la similar similar a una similar similar a una forma similar a una forma similar a una forma similar a una forma similar
They have an assigned heavy length (with almost 60 percent of their financial assets) in low but guaranteed performance assets, such as deposits, small savings and pension funds and forecasts. However, we have noticed a change in households that invest the behavior with the allocation towards the reduction of low -income general assets.
In 2011-12, bank deposits dominated home financial savings, contributing 57 percent of savings. By 2022-23, deposits constituted 37 percent of household financial savings. Investments in mutual funds increased to 6 percent of gross savings by 2022-23 less than 1 percent ago. The annual flows to mutual funds and actions that were ₹ 16.5 billion rupees in fiscal year 2012 have witnessed an increase of 12 times to ₹ 2.1 Lakh crore in fiscal year 23.
What is the HNIS mixture in your general AUM? Why do you say that ₹ 5-50 million rupees are more sustainable and scalable?
The breakdown of our clients: ₹ 50 Lakh – ₹ 5 million rupees: 21.8 percent of the total AUM; ₹ 5-50 million rupees: 53.7 percent or total AUM; and ₹ 50 million rupees and higher (UHNI segment): 24.5 percent of the total AUM.
The number of income tax filters that earn in ₹ 50 Lakh is constantly increasing with each year, indicating a growing group of high -income people with investment potential. As they accumulate wealth, many will actively seek professional financial advice. This makes the HNI segment of ₹ 5-50 million rupees not only highly scalable but also a key objective for long-term growth.
Recommendations on investments and assets of assets are those of the interviewee and not of the Bachelor of Law. portfolio equipment