In the changing business environment, leading corporations are redefining collaborations. Last year LIC Mutual Fund found a partner in the Nomura group that took a 35 per cent stake in it. The move is yet to reflect in its performance.
Disappointing AUM growth: AUM growth has not been that disappointing. What is truly disappointing are the flows into equity funds which have recorded net outflows on most occasions in this financial year. In the future, the business is likely to get skewed towards the larger players, like corporate distributors and brokers who can charge investors a fee for their services.
Regulatory changes: The distribution business has been affected because of the removal of entry loads. In the coming years the intermediaries will have to demonstrate their ability to create value for the investors and establish a track record to earn the trust of the investors.
State of the market: Investor confidence has bounced back looking to the positive signs in the economy, with the GDP showing healthy growth and the good monsoons indicating even better. In any event, the long term story of India was always a compelling one.
The road ahead: We would like to shift from a marked dependence on liquid plans to a broader equity-oriented investor base.
This article was originally published on October 27, 2010.
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