Many Indians enter retirement with limited cash flow, as they fail to strike a balance between healthy and unhealthy debts. In an exclusive interview with Pushpita Dey, CEO of Edelweiss Mutual Fund, Radhika Gupta explains why disciplined saving, avoiding unhealthy debt, and building liquid investments matter more than simply accumulating assets.
Foreign investors have pulled out over Rs 62,800 crore from Indian equities in just the first fortnight of June. Is this a cyclical risk-off phase or a structural reassessment of India?
I think we get very emotional about foreign capital.
Foreign investors make global asset allocation decisions. They have 20, 30 or even 40 markets to choose from. Their decisions depend on valuations, AI opportunities, taxation, and what's happening in their home markets.
India has been temporarily out of favour for a combination of reasons, but I don't believe this reflects any structural concern about India's long-term growth story.
What do you see as the main reasons behind foreign investors pulling out? Is taxation the key concern?
India doesn't fit neatly into any single investment category. We're not the cheapest market, nor are we the fastest-growing one, and we don't yet fit into the AI investment theme.
Yes, taxation could certainly improve. We've already seen changes on the fixed-income side, and I'm sure policymakers remain open to evaluating other areas as well. More broadly, we should continue improving the ease of investing and the tax framework for foreign investors.
How long can domestic flows continue to offset sustained foreign outflows without affecting market valuations?
They've already absorbed a significant portion of the selling.
The bigger question is: how long can foreign investors keep selling? Eventually, selling moderates because there's only so much they can exit.
If foreign investors continue to sell while domestic investors keep buying, markets simply stop moving higher. If you look at the primary market, very little has happened over the last six months. Foreign selling through the IPO route has also slowed because issuance itself has moderated. These are self-correcting mechanisms.
You often say you closely track consumer data. What investment patterns are you seeing across age groups and professions?
One encouraging trend is the rise in women investors. Nearly 35% of our investors are women, making them one of our fastest-growing segments, particularly women in their 20s and 30s.
Women also tend to invest with longer time horizons than men, which is a positive behavioural trait.
That said, every demographic has its weaknesses. If I had to identify one common behavioural issue, it would be the obsession with short-term returns and recent performance.
Is that behaviour common across all demographics?
Absolutely. Bad investing behaviour has no borders.
You recently called Specialised Investment Funds (SIFs) the 'investment product of the decade'. What will determine whether they become mainstream, and what risks should investors understand?
I don't think the Rs 10 lakh minimum investment threshold is very high in today's India. An investor putting Rs 10 lakh into an SIF is likely to have an overall investment corpus of around ₹1 crore. Today, many investors have portfolios worth Rs 50 lakh to Rs 2 crore.
That said, SIFs shouldn't be the first investment product someone buys because they involve greater nuance and complexity.
I don't believe anyone should invest in something they don't understand. However, investors should make the effort to learn about these products.
Many people invest before understanding basic finance. Do you think information overload, especially on social media, is the biggest barrier to financial literacy? Where should beginners start?
The purpose of social media should be investor education. I don't want to say social media is bad—it is a great platform to communicate. But creators need to be responsible about the content they publish, and users need to be equally responsible about the content they consume.
The challenge is that investing is inherently boring.
If you ask me five times what you should do, I'll probably give you the same answer every time -- do an SIP, increase your income and invest in diversified funds. Eventually, you'll get bored of hearing that. People are heavily influenced by two-year returns and try to build an entire investment narrative around short-term performance.
Social media thrives on extremes.
