People don't feel 'richer' when gold, silver prices go up: HDFC AMC's Navneet Munnot explains why

HDFC AMC's managing director and CEO Navneet Munnot

HDFC AMC's managing director and chief executive Navneet Munnot believes that gold and silver doesn't have the same wealth effect in India as other asset classes.

"Unlike other asset classes, gold and silver doesn't create the positive wealth effect in India. We sound very counter intuitive, because when gold and silver prices are going up, regardless of the amount of gold and silver you have in your house or locker, you feel poorer. Because you think that I'm going to buy more and I have to buy more and my next purchase is going to be higher," Munnot said during Moneycontrol's Mutual Fund Summit 2025 in Bengaluru on October 27.

Munnot expressed confidence in Indian investors and said there is more maturity now among them with most advocating for staying invested for the longer term rather than "chasing short-term performance".  He added that the country is turning into a nation of investors.

"This nation is transforming from a nation of savers to a nation of investors and nation of savers. People are lot more optimistic, aspirational and ambitious," Munnot said. "The people want to create wealth, and they are exploring many things today."

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Munnot further said that the world has seen few compounding stories such as India’s.

“India is a compounding story. Other than United States, there are very few places in the world which are a compounding story,” he said.

In addition, the country’s mutual funds industry has moved on from being product-led to becoming more solution-oriented.

He also said that the share of equities in the household balance sheet of India has grown from being just 2.5 percent 10 years ago to now being around 6 percent.

“If you look at the household balance sheet in India, 50 percent is real estate. 15 percent is gold, 15 percent is bank deposits, equities is less than 6 percent. This number was two and a half percent 10 years back.”

The top executive of one of the largest assets management company said mutual fund is growing as a percentage of bank deposits over the last 10 years. However, between 2016 and now, fixed income and money market AUM, as a percentage of bank deposits, has actually gone down, Munnot added.