'Generational shift happening...': Groww Mutual Fund's top executive on Indian equity market
Gold Investment: Anupam Tiwari of Groww Mutual Fund touched on the historical reason why India was perceived as a country particularly obsessed with gold. He said gold and land were the only asset classes available to Tier II and Tier III cities of India for the longest time.
- Jan 23, 2024,
- Updated Jan 23, 2024 11:14 AM IST
Anupam Tiwari, Groww Mutual Fund's head of investment, believes that India, perceived to be a nation obsessed with gold, is swiftly moving towards equity among major asset classes, but the journey has only started.
In a conversation with Shashank Udupa, on the YouTuber's podcast, Tiwari said that the investment in equity in India would jump five to six times in the years ahead.
"We are highly underinvested in equities as a country. In my opinion these [current] flows are not great, they are just starting up. We will become 5x, 6x over a period of time. There is a generational shift happening," Tiwari said.
He explained one of the key reasons for the change is the access to financial education. "My father would never understand what is equity, what is mutual fund. He still doesn't. His favourite thing is FD. In the last 20 years, with lot of financial education, a new generation is coming in, which is more attuned to financial knowledge. So, it [equity investments] will keep on growing. There is no reason for it to not to," he said.
"If you really want to beat inflation over long term, equities are the only way. It creates a lot of wealth. It is volatile, but if you give it time that volatility goes down."
Tiwari also touched on the historical reason why India was perceived as a country particularly obsessed with gold. He said gold and land were the only asset classes available to Tier II and Tier III cities of India for the longest time.
"If you look at history, financialisation of savings started very late in India because there was no institution available to channelise savings of any individual to financial products. So, how do you save money? You want to convert your money or the currency to something which is more durable and [it] also grows."
He said people had to tackle inflation, which would otherwise kill the purchasing power of money, so they'd either buy land or gold. "That was the only option at that time. FD (fixed deposits) came much later when banks came. So, that habit [buying gold or land] remained. A lot of people say 'why this obsession for gold in India?' Because you could do only that."
He further emphasised that since land would be more expensive and needed larger sum of money, people would invest in gold.
"If you have a very big chunk of money, you can buy land. But if you don't have that big chunk of money, what do you do? You have to buy gold. So, when banks started coming in you had another avenue to put your money into. That's how financialisation increased and then came mutual funds, etc. Insurance companies, they penetrated and they created more avenues for financial savings."
Also read: Mutual funds: How Rs 10,000 a month in SIP turned to Rs 2 crore
Anupam Tiwari, Groww Mutual Fund's head of investment, believes that India, perceived to be a nation obsessed with gold, is swiftly moving towards equity among major asset classes, but the journey has only started.
In a conversation with Shashank Udupa, on the YouTuber's podcast, Tiwari said that the investment in equity in India would jump five to six times in the years ahead.
"We are highly underinvested in equities as a country. In my opinion these [current] flows are not great, they are just starting up. We will become 5x, 6x over a period of time. There is a generational shift happening," Tiwari said.
He explained one of the key reasons for the change is the access to financial education. "My father would never understand what is equity, what is mutual fund. He still doesn't. His favourite thing is FD. In the last 20 years, with lot of financial education, a new generation is coming in, which is more attuned to financial knowledge. So, it [equity investments] will keep on growing. There is no reason for it to not to," he said.
"If you really want to beat inflation over long term, equities are the only way. It creates a lot of wealth. It is volatile, but if you give it time that volatility goes down."
Tiwari also touched on the historical reason why India was perceived as a country particularly obsessed with gold. He said gold and land were the only asset classes available to Tier II and Tier III cities of India for the longest time.
"If you look at history, financialisation of savings started very late in India because there was no institution available to channelise savings of any individual to financial products. So, how do you save money? You want to convert your money or the currency to something which is more durable and [it] also grows."
He said people had to tackle inflation, which would otherwise kill the purchasing power of money, so they'd either buy land or gold. "That was the only option at that time. FD (fixed deposits) came much later when banks came. So, that habit [buying gold or land] remained. A lot of people say 'why this obsession for gold in India?' Because you could do only that."
He further emphasised that since land would be more expensive and needed larger sum of money, people would invest in gold.
"If you have a very big chunk of money, you can buy land. But if you don't have that big chunk of money, what do you do? You have to buy gold. So, when banks started coming in you had another avenue to put your money into. That's how financialisation increased and then came mutual funds, etc. Insurance companies, they penetrated and they created more avenues for financial savings."
Also read: Mutual funds: How Rs 10,000 a month in SIP turned to Rs 2 crore