CEO Speak

Navigating 2023 and Road Ahead

As we wrap up an eventful year in the Indian mutual fund industry, it’s time to reflect on the journey that we have taken together and the milestones that we have achieved amid a dynamic domestic and global geopolitical backdrop.

When I reflect on 2023, I believe there were three important factors that played a crucial part in the mutual fund story in India, and I believe they will continue to remain significant in the new year as well.

Strong and resilient domestic economy - The India growth story continued in 2023 with good corporate results, infrastructure investments, increasing tax collections amongst some positive macroeconomic indicators. And this reflected in our equity markets.

While the year started on a tentative note with very volatile markets, as we progressed into the second half of 2023, we saw the Indian equity markets surpass multiple positive milestones. The mutual fund industry has bounced back strongly this year with a remarkable Rs 9 lakh crore surge in the asset base, propelled by a buoyant equity market, stable interest rates and robust economic expansion. The AUM of the mutual fund industry rose to an all-time high of Rs 49 lakh crore in 2023 (till November-end) from Rs 40 lakh crore at the end of December 2022. BSE Sensex also scaled unprecedented heights this year, surpassing the 64,000 mark in June, and towards the end of the year crossed 72,000 mark.

A well-regulated mutual fund industry - Our industry has come a long way in building transparency and investor confidence in a market that has been traditional and conversative historically. It has taken years of efforts from the regulators, AMCs and distributors to bring in systems, processes, awareness and reliability in the industry. Customer experience has improved significantly with the ongoing digital transformations across financial institutions. Markets have now seen multiple cycles that provide historical datapoints to investors to take informed decisions. 2023 also saw continuous efforts from all participants in this industry to enable and strengthen mutual fund as a viable alternate investment space.

Investor confidence - This stems from my preceding point that has resulted in increasing trust in the mutual funds for investors. This year, the growth was supported by inflows into equity schemes, especially through Systematic Investment Plans (SIPs). Monthly inflows through SIP, soared to a historic high of Rs 17,073.30 crore in November 2023. The number of SIP accounts reached an all-time high of 7.44 crore in November. This is a reflection of investor confidence in embracing mutual funds as financial asset and understanding the power of SIP for long term wealth creation.

As we embark on a new year, I urge all our investors to be cognizant of the fact that the markets will be dynamic with domestic and global uncertainties. However, the above mentioned 3 points will continue to be the bedrock for our industry growth and the financial decisions of investors.

Looking ahead in the coming year, we at HSBC Mutual Fund are excited about the opportunities that lie ahead. We remain committed to providing you a diverse range of products, backed by diligent research, robust risk management and a focus on delivering value to our customers. Our commitment to transparency, integrity and customer satisfaction remains at the core of everything we do. We will continue our work in enhancing our investor education initiatives so that it empowers all investors with knowledge needed to make informed investment decisions.

We wish you and your loved ones a Very Happy and Healthy 2024. Together we look forward to a year filled with growth, prosperity, and success.

Source: AMFI, Bloomberg

Indices data as on Dec 29, 2023 and MF data as on Nov 30, 2023.

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