We continue to focus on communicating in the consumers' language and responsible wealth creation, says Chandresh Nigam of Axis Mutual Fund
20-Nov-2013 •Research Desk
What factors would increase the appetite for investing in mutual funds beyond the top 15 cities?
Steps taken by Sebi on these have helped. One, it has incentivised fund houses to go beyond 15 cities and second, with the IAP budget, AMCs are now looking to meaningfully engage with investors. There is growing awareness within AMCs that they need to communicate the benefits of investing and planning, rather than focus on the intricacies of investing. We need to go into the investors' world and then design products that address their concerns. Investors today are a confused lot on what is suitable for them.
Have the direct plans seen greater retail participation?
Not yet. Retail participation was not hinged on just creating low expense plans. MFs are a push product and to that extent we are still today in the educating phase. We still have a lot to do in terms of addressing basic issues. As said earlier, the challenge for us as manufacturers is to help investors understand the role of MFs in their life.
What investor education initiatives has your AMC taken?
We have undertaken various initiatives across media. First, we have undertaken research in B-15 cities to understand what are their current disposition, awareness levels on MFs. Research gives us a peek into the whys (why is the investor not considering MFs) before deciding the what needs to be done and how it needs to be done. We have also tied up with reputed content providers to give us basic articles that elucidate the benefits of financial planning, asset allocation. Through our sponsor we are undertaking road shows for consumers that explain the need for financial planning, the need to plan for key events in one's life. We have used social media effectively through a series of films that address common MF misconceptions in an entertaining manner. The attempt is make this category far more approachable than it is today. We are also investing in the production of a variety of innovative educational aids that simply explain the benefits of staying invested, the benefits of asset allocation and the need to build in inflation in planning.
What's the road ahead for your AMC?
When we launched our fund 4 years back we articulated three pillars on which we would build this business- communicating in the consumers language, long term relationships and responsible wealth creation. If one were to look at recent SEBI initiatives our stress on these pillars seem to have been vindicated. Risk managed products- We have always focused not just on returns but on the underlying risk too. This focus on risk has worked well in the past and is something that we will continue to stress on. Reach- We launched with a presence in over 70 cities. These offices will serve as hubs for us as we use this base and the Axis brand to increase the reach of MFs deeper in the country. Understanding the consumer is an ongoing process and we will work with our intermediaries to do just that. This understanding and further implementation of this understanding helps increase engagement levels and in turn leads to greater confidence and trust .