'Digital investing has resulted in shorter holding periods'

Model-driven vs human-led portfolios?

We aim to offer both fundamentally driven and model-based strategies to help investors achieve their goals. Our portfolio has traditionally focused on fund manager-led strategies backed by deep investment research. These will continue to form the bulk of our AUM in the near term, as they have proven effective in navigating diverse market environments. That said, it is important to highlight that our sponsor, Dai-ichi Life Holdings, Inc., brings extensive global experience and proven capabilities in quantitative strategies. Building on this foundation, we introduced our first quant model-based product—Union Active Momentum Fund—last year, marking a strategic step towards expanding our model-driven offerings. Over time, model-driven strategies may hold a relevant weightage in our AUM.

Early SIF launch: Aim and strategy?

As one of the early movers in SIF, our strategy extends our purpose-led investing philosophy into long-short strategies to deliver consistent, risk-adjusted returns. These strategies are designed for investors seeking stable performance across cycles. We’ve assembled a specialised team with experience in long-short strategies, supported by strong research and risk frameworks to manage volatility and enable long-term compounding.

On low-friction investing and investor churn.

Digital investing has broadened participation in mutual funds. But, it has also resulted in shorter holding periods. As per AMFI’s March 2025 report, only 19 per cent of direct SIPs last over five years, compared with 33 per cent of distributor-guided SIPs. This underscores the value of financial guidance in sustaining long-term discipline. (Source: Economic Times, March 2025). We’re addressing this through three levers:

Product: Launching products with built-in asset allocation features that dynamically adjust market capitalisation based on relative valuations. For example, Union Multi Asset Allocation Fund, Union Diversified Equity All Cap Active FOF and Union Income Plus Arbitrage Active FOF which includes tax-efficiency.

Feature: We’re developing an option to combine SIPs with automated SWPs to meet cash flow needs without disrupting long-term compounding.

Communication: Our communication nudges long-term investing behaviour. Our “Badhna Hai Toh Lage Raho, SIP Karo” campaign promotes long-term behaviour and investing consistency.

Our goal is for technology to simplify investing and reinforce discipline for wealth creation.

Rapid-fire questions

• Beyond returns, one criterion you want investors to judge your AMC on: Well-defined investment philosophy, process and true to label.
• If not running an AMC, what would you be doing? Civil services.

This article was originally published on October 27, 2025.