Speaking to ET Now, Kulkarni said the COVID-19 pandemic played a critical role in reshaping investment preferences. During the crisis, many households discovered that traditional assets such as real estate were not as easy to liquidate as they had once believed.
“People realised that liquidity has a cost. You had a house, but you could not sell it. Businesses were shut, salaries stopped for some people, and money was needed urgently. They realised that real estate was not easy to unlock as they had thought earlier.”
The experience prompted many investors to rethink how they allocated their savings. Mutual funds, with their ease of redemption and accessibility, emerged as a preferred alternative.
Technology Accelerated Financial Inclusion
Kulkarni credited technology for making investing simpler and more accessible than ever before. Digital platforms have dramatically reduced onboarding times, allowing investors to complete transactions within minutes.”All these apps that are there in the market, and the ease with which integration has happened across onboarding and transactions, mean you can literally do everything within five minutes. That has been a big behavioural change.”He noted that while technology was a powerful enabler, the real catalyst was investors’ growing appreciation for liquidity.”Clients told us that when they needed money, they could redeem their mutual fund units immediately. In some cases, they could not even go to a bank to redeem a fixed deposit because branches were inaccessible. Those were the baby steps that fuelled the whole technology story and the idea of looking at mutual funds more positively.”
According to Kulkarni, serious money began flowing into mutual funds after investors witnessed these advantages firsthand, a trend reflected in the sharp acceleration of SIP growth since 2020.
Investors Are Asking Questions, Not Pressing the Sell ButtonMarket volatility over the past year has tested investor conviction, particularly among younger participants who entered the market after 2020. Yet Kulkarni believes the industry’s response has been encouraging.
“Ten years ago, if these kinds of choppy markets had existed, I can guarantee you the sell button would have been hit very often. Now investors do not hit the sell button immediately; they consult.”
He acknowledged that younger investors tend to react more quickly to market swings.
“It is the younger investor who is more adept at using fintech apps. They can buy or sell a mutual fund with the same ease with which they order an Uber. These are the people who get shocked quickly when volatility happens.”
However, he believes access to historical market data has helped investors stay invested through difficult periods.
“Today, you can show investors what happened in 2000, in 2008, and during COVID. Every time markets corrected sharply, the units accumulated at lower levels eventually generated strong returns when the recovery came.”
Communication Gap Remains a ChallengeDespite growing awareness, mutual fund participation remains relatively low. Kulkarni pointed to findings from SEBI’s Investor Survey 2025, which showed that while 63% of households are aware of securities market products, only 9.5% actively invest.
He believes the industry bears part of the responsibility.
“We are too technical in our conversations. We talk about ratios, abbreviations, and globally used terms. The retail investor does not understand that.”
Kulkarni argued that financial communication must become simpler and more localised.
“We are still largely communicating in English and to some extent Hindi. We are not communicating enough in Marathi, Bengali, Tamil, Kannada, Assamese, or other regional languages. People want simple answers. They want to know whether they can earn better returns than a fixed deposit and what kind of safety is involved.”
Smaller Cities Driving the Next Wave of GrowthWhile assets under management remain concentrated in major metropolitan centres, Kulkarni said transaction data paints a very different picture.
According to him, SIP registrations from cities beyond the top 30 urban centres are growing faster than those from major metros.
“Today, the number of SIPs coming from beyond the top 30 cities is outpacing SIPs from the top 30 cities. If you look at the number of investors and transactions instead of only AUM, you will see the real change happening.”
He added that wealth levels in cities such as Mumbai, Delhi, and Bengaluru remain higher, which explains their larger contribution to industry assets. However, participation is broadening rapidly across smaller towns and cities.
Patience Is Becoming the New Investment ThemeKulkarni stressed that investor education remains central to maintaining confidence during volatile phases.
“Data is the truth. There are periods when SIPs may not generate returns for 15 or 18 months. At times, returns may even be negative. But when the cycle turns, those units accumulated at lower NAVs can suddenly deliver returns of 14% or 18%.”
He also highlighted the importance of adapting communication for younger audiences.
“Investors under 30 do not have the patience to listen to a 30-minute explanation. You have to communicate through short videos, reels, and concise messages that they can absorb quickly.”
Balancing Excitement With Long-Term Wealth CreationThe rise of speculative trading and digital assets has sparked concerns about over-financialisation among younger investors. Kulkarni acknowledged the risks but advocated a balanced approach.
“Many young investors made money when markets and digital currencies were rising rapidly, but they have also experienced losses of 30%, 40%, or even 50% in the current market.”
His advice is simple: separate excitement from long-term wealth creation.
“I tell young people to keep an excitement kitty. Use it for thrill and excitement. Travel, enjoy life, and spend on experiences. But also keep some money safe and invest it for the long term without looking at it every day.”
A Bullish Outlook for the IndustryLooking ahead, Kulkarni remains highly optimistic about the growth potential of India’s mutual fund industry.
Household participation in financial assets has already risen significantly over the past few years, and he believes the trend has much further to run.
“We were in low single digits in 2021 and have now reached low double digits. Can we reach 30% or 40% over the next ten years? Why not?”
He cited improving investor engagement, technological advancements, stronger distributor networks, and awareness campaigns by industry bodies as key drivers of future growth.
“Awareness is growing. Technology is enabling more people to invest. Distribution partners are engaging more closely with clients. I have never seen an industry so well positioned.”
Kulkarni concluded with a strong vote of confidence in the sector’s future.
“I am a super bull. Our industry will do exceedingly well.”
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