HOW TO FOLLOW THE SMART MONEY

STOCK markets are a confluence of a variety of investors.

They are broadly categorized into retail and institutional investors. If you dive more deeply, individual or retail investors can be categorized into small and high-net-worth individuals. If you are not among the wealthy, you are a retail investor. Over four crore people like you own mutual funds and demat accounts. In a country of 140 crore people, that is still a tiny number but much higher than less than two crore about five years ago.

The annual report of the Securities and Exchange Board of India was published last week. It makes a lot of interesting observations. While there is coverage about institutional investor activity, there is little information about a category of investors that could be put under 'smart money'. These are clients managed by portfolio management services or PMS. The Sebi annual report highlights that high-networth individuals (HNIs) are seeking professional help outside the ambit of the traditional mutual fund industry. They want more customization of financial advice, which is creating a fastgrowing private wealth management industry.