MIIS 2026: Frictionless investing, double-digit returns propelled retail participation

The sharp rise in retail participation in India’s capital markets has been propelled by higher awareness of mutual funds, digitalization enabling frictionless investing, and stable long-term returns, speakers said at the Mint India Investment Summit 2026.

Shravan Sreenivasula, ED & head, Investment Solutions, Avendus Wealth Management, noted that while access and awareness have helped, returns remain the core driver.

“Even as last two years the markets have been muted but even now we clock a number of about 13% of thereabouts on a 3, 5, 10 year basis so that interests a lot people to come into markets,” he said, adding that IPOs have also been a propellant of retail participation and platforms, like Mint, that have made the information arbitrage go away.

As of 2024, the 3-, 5-, and 10-year returns stood at about 15–16%, he said.

Frictionless shift

Sushant Bhansali, CEO, Ambit Asset Management, said that in the last five years, risk appears to have reduced materially. Drawdowns have been limited to 15–17%, compared with 30–40% in previous cycles.

He believes that this has provided comfort to investors, but said ‘frictionless investing’ has been the real game changer.

However, he stressed that it is not only about access, but about wealth creation. Bhansali said they are genuinely long-term investors who like to buy companies after doing some research and these DIY investors are leading this growth, supported by strong market performance over the last decade when the Nifty has not delivered a single negative year.

“So it's not just access, it's also about the impact this is creating in everybody's mind in wealth creation.”

Sreenivasula added that investors allocate money across different buckets and in a bull market, “you will see that trading becomes a national pastime”.

But many investors are focused on long-term wealth creation. Equity assets under management of the mutual fund industry now stand at about ₹36 lakh crore, reflecting growth of 60% or more over the past three to five years. He also noted that 56% of investors now hold investments for more than two years, compared with 40% a decade ago.

HNI shift

Beyond retail, high-net-worth investors (HNIs) are also altering allocation patterns.

Sreenivasula said that since 2015–16, growing interest has emerged in VC/PE funds, with commitments now at about ₹3 lakh crore.

With the indexation benefit removed, bond fund index returns often fail to beat inflation, pushing investors toward credit funds and higher equity allocations.

“So there's a sizeable shift in risk taking that we have seen among the investors, especially the HNI and Ultra HNI investors and the opportunity set has also increased to cater to those needs of the investors,” he said.

Bhansali observed that the biggest shift has been from real assets to financial assets. Rapid wealth creation over the past 5–10 years has emboldened investors to take greater risks.

“The new age founders are of a different breed that I don't have much to lose. It's like double or quits.”

According to him, this new money is more impatient than traditional capital. While older investors were willing to play three- and five-year cycles, newer investors begin questioning performance within one or two years. “If you don't deliver for three years, the money is gone,” he said.

Regulatory lens

On regulation, Sreenivasula said the framework is moving in the right direction but needs further refinement.

He questioned the rationale behind allowing accredited equity investors to invest ₹25 lakh in an alternative investment fund (AIF). If an HNI holds an accredited investor (AI) certificate with a net worth of over ₹700 crore, he would rather invest into an AIF with a minimum commitment of ₹1 crore, yet there is a ₹25 lakh enablement provided, he said, adding that inter-regulatory understanding must improve.

He also pointed out that RBI limits on mutual fund investments into foreign equities are hurting retail investors, while HNIs find alternative routes such as GIFT City.

“But in the last 10 years, I think the kind of ground which the regulators have covered is phenomenal,” he said.

As markets mature, participants said the next phase of growth will hinge not just on ease of access, but on sustaining returns and balancing rising risk appetite with regulatory clarity.