Don’t ignore Alternative Investment Funds while building your long term portfolio; here’s why

Picture for representational purposes.

Indian economy is already looking up after crucial and series of difficult reforms have been implemented over the last three years while some are still in the process of getting implemented.

In this scenario, Indian investors are betting big on equities, especially when gold and properties are not on the preferred list of assets.

In a tectonic shift most investors – Ultra HNI, HNI, and retail – are focusing largely on long-term investments rather than being swayed by short-term scenarios both external and internal.

Alternative Investment Funds (AIFs) and Mutual Funds (MFs) are tracking these trends and are successfully raising funds based on the stellar medium-term outlook for Indian equity markets.

Considering 65 percent of Indian population is under 35 years, consumption is going to be the major driver of the economy in the next two decades.

Which means almost all consumption based companies and sectors would be seeing phenomenal growth. Jan Dhan Yojna, Aadhaar, and Mobile trinity had helped the government save $10 billion in leakages and down the line in 3-4 years will help more people to invest in the digital mode.

Many ongoing and upcoming government projects like Bharat Mala Project, Housing for all, Increasing Financial Transparency, One Nation one Tax (GST), rural electrification, recapitalization of Indian public sector banks would spur Indian economic growth to new heights.

Many specific theme-based AIFs have recently raised significant long-term fund successfully. As per public information, IIFL AMC has collected more than $1 billion for its pre-IPO fund (which is a unique theme and has resulted in others like Edelweiss and some others are planning).

Also, you have seen in the last month itself AXIS, DSP, HDFC, and UTI, with unique themes they have collected more than Rs 4,000 crore put together. This is, in addition, the regular SIP collection of Rs 5600 crore each month.

Most investors have matured in the last few years and are steadily investing even as uncertainties like North Korea tussle with the US, the war in Syria, issues in Palestine, Gujarat and Himachal state elections are happening in the background.

Equity mutual funds have registered an inflow of over Rs 19,508 crore, balanced fund Rs 7,614 crores, ELSS Rs 800 crores and equity ETFs Rs 12,447 crore in the month of November.

Kudos to the regulators for pushing awareness across all the segment and the distributors who are helping there investor to build a long-term portfolio by advising them to invest through SIP route. The industry is witnessing the strong flow of Rs 5,600 crore per month.

Based on regular interactions with clients across India we believe the demand would continue in the medium to long-term unless there is a black swan event.

Money is going to keep pouring into IPOs, Mutual Funds both through direct and SIP route besides direct stocks. This is one of the good times for the investors to build a portfolio.

However, as financial services professional, I would like to advise investors that don’t get carried away with random advice. On a lighter note don’t become Sharma Ji and invest because Verma Ji has done because every individual has separate goals and risk appetite. Please consult your financial advisor.

Disclaimer: The author is Vice President, Products, IIFL. The views and investment tips expressed by investment expert on are his own and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.


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