while the guidelines issued by sebi do not always go down well with the mutual fund industry the intent is to help the investor kunal kapoor tells et wealthinflows into domestic mutual funds are soaring is this trend here to stayindia has witnessed a move towards more financial assets a trend which in itself has spurred this growth fewer people are putting as much money in real estate or gold as they did earlier that shift is leading to a lot of inflowsdemonetisaton has been one of the biggest drivers of this shift in investing habit it is contributing to the growth of the mutual fund industry there is also the reality of many years of strong returns from the stock market that is also a driver for people parking money in mutual funds the trend is sustainable and part of a longterm cultural shift i dont think the benefits of demonetisation end in a year it will have a multiyear effect and change the financial markets in the country in a meaningful wayis money flowing into the right fundstypically we find that people chase performance it implies that they are buying things at a time when perhaps it is not in their best interests there is a tendency to pile into the market when prices are up so while the mutual fund assets are growing for the right reasons when we delve deeper into where the money is flowing we realise that the performance chasing nature has not really changed the flows into the mid and smallcap funds segment reflect this nature where the outperforming asset classes tend to attract more money it is also evident in the attraction towards a number of ipos this yearbalanced funds have witnessed a sharp rise in assets many amcs are emphasizing on consistent dividend payouts from these funds what are your thoughtsbalanced funds are good vehicles where the likelihood of the investor damaging his portfolio is limited as these are diversified across asset classes they should be bought not because of the dividend play but because it is the right risk profile and time horizon for the investorare the new norms for categorisation of schemes a step in the right directionas a regulator sebi has been proinvestor they really do care about the outcome that investors get from their investments many of the guidelines or regulations it issues may not always be well received by the industry but generally they have the right intent i view this reclassification through the same lens sebi has shown the right intent and now the question is how this will be implemented in the long term it will be very difficult for this to work without the free market itself guiding it i am a believer in free markets and their ability to selfcorrect if need be this may help clean up some problems that persist in the industry such as proliferation of products but there are bound to be some side effects it is a