About the Report:
In this week's article, we are sharing the insights from the recently released investor survey by DSP BlackRock. BlackRock conducted the annual survey of 31,139 people this time across 20 markets, in conjunction with Cicero Group, a research agency. India has been included in the survey since 2014 and this year, it was conducted online among 1,500 respondents aged 25-74, who had a role in financial decision making.

Key Findings (India Specific):

Investor Sentiments:
Despite global economic uncertainties, financial sentiment among Indians (84%) is the most positive of all markets surveyed (global 56%).
The confidence of financial decision making (savings & investments) is also very high in India (82%) compared globally (53%).
High cost of living and healthcare costs are prevalent concerns, prompting Indians to make ‘saving money’, ‘growing their wealth’ and ‘long-term healthcare’ some of their top financial priorities.
Most respondents feel that issues such as India’s economic performance, job market and economic reforms have either improved or remained consistent over the past year.
Indian stock market performance, infrastructure development and the government’s economic and development reforms inspire the highest confidence levels, while affordability of real estate is a concern.
Indians associate financial independence to earning own income and never having to ask money from others.

Asset Allocation & Investment Trends:
India has among the highest incidences of savings (97%) and investments (85%) among all global markets surveyed (83% & 53% respectively).
Respondents acknowledge that they are over-exposed to cash (22% of total holdings) and deposits (24%) and believe that they should lower their allocation (to 18% each) in these asset classes.
Respondents acknowledge that equity mutual funds (6%) and debt mutual funds (3%) have a lower exposure which needs to be increased in their total portfolio (to 8% & 5% respectively).
Physical assets such as property and gold are still popular among investors.
Almost half would like to increase their exposure to stocks and equity mutual funds over the next 12 months
Indian respondents appreciate the growth potential and value creation from equities including mutual funds, however, they still like the perceived assurance from traditional asset classes.
Indians are looking to reduce their exposure to idle cash and invest their money in other asset classes. Better knowledge about investing would encourage 41% of respondents to move more of their cash into investments. Guaranteen returns is however a greater motivator with 47% of respondents willing to move cash into investments in response to this factor.

Investment habits & decision making:

• Over 80% of Indian respondents feel that they take financial planning seriously and that having a financial plan gives them peace of mind.
• Family plays a major role for Indian respondents in their investment decision making. When it comes to long-term savings and investments, family and friends (49%), banks (46%), online sources (43%) and financial advisors (34%) are the most common sources of information.
• Retirement (50%), children’s education (46%) and buying a home (33%) are the top three investment goals for Indian respondents.
• 61% of household financial decision-making is made independently by a single member of the family. When the responsibilities are shared for remaining 39% of times, it is mostly shared with the spouse - for nearly 80% of the time.
• When household financial decision-making responsibilities are shared, only 31% of women respondents are likely to make the final decision compared to 60% of men.
• Around 60% of male respondents feel that their spouse knows as much or more than them when it comes to their investments while the corresponding figure for women respondents is over 90%.

Relationship with financial advisor:

• When asked who is the first person to come to mind when hearing the words 'financial advisor, the top two responses included 'family' (38%) and 'IFAs' (25%) followed by CA (10%). For men respondents, IFAs had the higher mind share (30%) closely followed by family (29%). For women resondents though, family (48%) had the highest mind share followed by IFAs at (20%).
• 58% of Indian respondents are using financial advice, with a higher percentage of women (65%) taking financial advice as compared to men (52%).
• 77% of advised Indians use a financial advisor for most or all financial decisions, with a higher percentage of women (79%) again as compared to men (75%).
• Nearly all advised respondents where found to be satisfied with their financial advisors.
• 83% of advised Indians pay a fee for financial advice, and 88% of those advised believe they are getting excellent or good value for their money.
• Of those who do not pay a fee for financial advice, a majority (78%) would still retain their financial advisor if they started charging a fee.
• Seeking new investment ideas and minimizing risk while investing are the most discussed topics with financial advisors.
• Women place highest value on the ability of a financial advisor to explain financial matters in a manner that they understand. Men place highest value on the ability of financial advisor to minimise risk when investing followed by the ability to protect savings /investments from inflation.

Retirement:

• Most Indian respondents recognize the need to plan for retirement and are investing specifically for it (80%).
• While Indian respondents feel confident that they will achieve their desired annual retirement income (88%), they still express concern (71%) that they won’t be able to live comfortably post retirement.
• Most Indian respondents who are saving for retirement, mentioned ‘high cost of living’, ‘child’s education’ followed by unplanned expenses as key factors making it difficult to save for retirement.
• Those respondents who haven’t started saving for retirement mentioned ‘other priorities’ and ‘not earning enough money’ as reasons why they haven’t started yet.
• Indian respondents seemed to significantly underestimate the corpus they would need for a comfortable retirement

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In this week's issue, instead of an article, we have chosen to give you a glimpse of the industry and it's trend ending December 2015. We hope this analysis will help you get some valuable insights into the industry and its' composition.

Key Observations:

• Assets managed by the Indian mutual fund industry has grown from Rs. 10.51 trillion in December 2014 to Rs. 12.75 trillion in December 2015. That represents a 21.26% growth in assets during CY 2015.

• The Equity asset class registered an impressive growth of nearly 27% during CY2015 in AUM. The composition of Equity oriented schemes have risen during the year and it stood at 31.28% in December 2015.

• The Debt asset class registered a growth of 12.10% during the year but it's composition fell by nearly 3.68 in absolute terms in the overall assets.

• As a category, most impressive growth in assets was recorded by the Balanced schemes of over 72%, followed by Liquid Funds at over 30%.

• There are 45,853,274 folio accounts in the mutual fund industry as at December 2015, of which 99% is accounted for by individual investors.

• As per AMFI, individual investors now hold almost the same share of industry’s assets, i.e 45.9% in December 2015, compared with 46.0% in December 2014. Institutional investors account for 54.1% of the assets, of which corporates are dominant with 86.5% of assets. The rest are Indian and foreign institutions and banks.

• The institutional investors have a share of over 92% of assets in Liquid Funds but only 17% in Equity Schemes where individuals are the prominent asset holders. In Debt asset class too, the institutional clients dominate with 61% holding of assets.

• As per AMFI, 59 % of total individual investor assets are held in equity oriented schemes followed by Debt at over 36%. Individual investors held only 4% in liquid funds and less than 1% in ETFs & FoFs.

• Nearly 81% of the investor folio accounts are in Equity schemes while 17% folio accounts are in Debt funds. Liquid and money market funds account for less than 1% of folio accounts.

• Individual investors account for the most of the accounts, across fund types. In liquid and money market funds, they hold the least number, at about 92% of the total accounts. Instituional investors have only 0.8% of folios in Equity funds but have nearly 17% of assets.

• 37% of the industry assets came directly. A large portion of the direct investments were in non-equity shemes where institutional investors dominate. Only 10% of retail investors assets are invested directly while 15% of HNI investor's assets (ticket size above Rs.5 lakh) were invested directly.

• Equity assets have a longer average holding period as compared to non-equity assets. 37% of equity assets have been held for periods greater than 24 months. Non-equity assets have been primarily held for periods less than a month (institutional assets in money market) or less than a year (other debt schemes).

Source: Information has been collated from AMFI & SEBI websites.

Client: Dr. Anil Ghia
Investor in DAAP since 21 March 2013
NJ Partner: VA Advisory Services Pvt. Ltd.

1) Please describe your overall experience of investing with NJ PMS provider (NJ Advisory Services Pvt. Ltd.)
Answer: My experience with NJ PMS has been fairly good.

2) What were your objectives at the start when you invested in DAAP? Do you think your objectives have been fulfilled by the portfolio manager?
Answer: My objectives were safety and good returns. They have been fulfilled to a large extent.

3) Do you think the portfolio manager churns the portfolio frequently?
Answer: The portfolio churn mostly depends on markets movements and is done on a need only basis.

4) What is your experience related to reports shown on website of NJ PMS?
Answer: My experience with the reports has been satisfactory. I normally view the reports provided on the Client Desk.

5) What are your suggestions to existing and prospective investors of DAAP?
Answer: I am nobody to advise, that is the job of the advisor.

6) What are your expectations from the portfolio manager?
Answer: My expectations from the portfolio manager are better performance, with timely execution of portfolio changes and asset allocation.

7) What role has your introducer VA Advisory Services Pvt. Ltd. played in helping you to select DAAP for you?
Answer: VA Advisory Services presented this novel idea to me and they were persuasive and convincing in their presentation.

Client : Mr. Prakash Golwala
Investor in DAAP since 04 Oct. 2010
NJ Partner: VA Advisory Services Pvt. Ltd.

1) Please describe your overall experience of investing with NJ PMS provider (NJ Advisory Services Pvt. Ltd.)
Answer: As a client, I was always confused as to how much Debt and Equity Ishould have in my portfolio at any given time. I am a long-term investor in equity market, and this problem use to constantly puzzle me. I was also looking for a solution, which could help me buy equities when the markets dropped.

I found the answers to my questions in NJ PMS – DAAP Strategy, as it assures an ideal balance between Equity and Debt asset classes. I think this is the best way to invest in long equity mutual funds.

2) What were your objectives at the start when you invested in Dynamic Asset Allocation Portfolio? Do you think your objectives have been fulfilled by the portfolio manager?
Answer: Yes, my objectives have been fulfilled by the portfolio manager. My objectives for investing in DAAP were to manage my portfolio in a proper and disciplined manner. I wanted timely re-balancing and re- structuring of portfolio and schemes and finally risk adjusted returns.

3) Do you think the portfolio manager churns the portfolio frequently?
Answer: No I don't think so. I am aware that the re-balancing is done based on market movements and valuation basis. I am against frequent churning of portfolios.

4) What is your experience related to reports shown on website of NJ PMS?
Answer: The reports are transparent and descriptive. They meet our requirements and being able to see them online, adds to the user experience.

5) What are your suggestions to existing and prospective investors of DAAP?
Answer: For investors, who are looking at investing in equity as a long term asset class, I feel this is the best method and strategy to plan your investments. You will never regret your Equity investments!

6) What are your expectations from the portfolio manager?
Answer: Although I am sure that NJ is doing their due diligence, I want them to keep selecting good equity funds and monitoring them regularly.

7) What role has your introducer VA Advisory Services Pvt. Ltd. played in helping you to select DAAP for you?
Answer: VA Advisory has not sold a product to me. They have sold the logic and science behind investing through the Asset Allocation strategy, which is the core of this PMS. They have given direction to my portfolio and that was the key factor in selecting the DAAP strategy for my investments.