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ING Mutual Fund: Survival Strategy

In the future there will be a greater share of retail investors, whereas HNIs are likely to show preference for innovation or more customized financial solutions.

There's no getting around the fact that businesses are in tough times. Add regulatory changes, and you have the recipe for the worst. "We will focus on innovation in products," says a determined Navin Suri, MD and CEO, ING Investment Management India.

Disappointing AUM growth: New flows in the retail equity space have indeed been affected in the past 12 months. However, in the HNI segment, new flows have been healthy, especially in alternative products. Mutual funds will continue to find a place in investors' portfolios across segments.

Regulatory changes: In the short term they have caught intermediaries unprepared. It will be another 12-18 months before most distributors are able to reorganize their business models and adapt to the changes.

State of the market: What matters is not the value of the index, but valuations. We expect Sensex earnings growth of 23 per cent and 20 per cent in FY11 and FY12, respectively. Based on these estimates, the Sensex is trading at a valuation of around 16x (FY12) which is not a stretch. Investors should expect returns in line with earnings growth.

The road ahead: We will help investors consolidate and simplify holdings across several managers in a way that is more time, cost and tax efficient for them.