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Engaging the investor

Every individual should know the importance of investing in mutual funds to meet their different long-term financial goals, says A Balasubramanian of Birla Sun Life Mutual Fund

What factors would increase the appetite for investing in mutual funds beyond the top 15 cities?
The very fact that agro-economy has seen the best periods and rising income has increased the potential of B15 cities. Combined with this, most of the B15 cities have attained very high level of technology-related penetration. This obviously has created a huge opportunity for us to build higher contribution coming from these cities. Clearly, investors in these cities are not so much exposed to Mutual Funds, including debt funds. However, selectively these markets have seen progress in equity participation through retail broking outfits that exist in these markets along with higher level participation in the Fixed Deposit market. Therefore, we believe that the best way to orient them to Mutual Funds is by driving high level of engagement to create awareness about Mutual Fund as an investing concept, and about Mutual Fund products that can suit their long term requirement.

Have the direct plans seen greater retail participation?
Direct plans have largely benefited investors from the institutional segment who normally have a team of people making these investments after their internal analysis, understanding and requirement. However, there exists a large pool of retail investors and HNIs who rely on timely advice and continuous engagement from distributors and financial advisors; therefore, this segment has been largely sticking to their traditional route of investing through distributors.

What investor education initiatives has your AMC taken?
We firmly believe that investors will understand the need to invest in Mutual Funds only when they realize the importance of investing in Mutual Funds. In other words -- with deeper knowledge, comes greater understanding. Every individual should equally spend good time in knowing about the importance of investing in Mutual Funds to meet different types of their long-term goals. To this effect, we started our Investment Education and Awareness Initiative -- 'Jaanoge tabhi toh Maanoge' through which we have been conducting Investors Meets at various locations across the country. We have completed over 25 meets so far and intend to cover 50 more such locations reaching out to an even greater number of existing and new Investors, over the course of the year. While doing ground level activities to reach out new customers across the country, we have also been using FM Radio medium to spread the importance of investing in Mutual Fund to meet their long term goals. We are also about to launch the next phase of 'Jaanoge tabhi toh Maanoge' to enhance the investor's know-how of the category and ultimately increase their acceptance for mutual funds.

What's the road ahead for your AMC?
Our focus has been doing an honest job of reaching out to more places, more customers and expand the market. So far, in the last few years, we have been progressing inch by inch in terms of growing our assets through right product offering, consistent investment performance and high level of customer connect/service. Today, we operate out of 92 branches. Out of which 70 branches are located in B15 cities. In the beginning of the year, we identified close to 50 locations to have presence in the form of physical branch as well as market representative. From April till date, we have opened 20 new branches. We have also created virtual office model in few of the locations through representative model and enabled acceptance of applications from customers and Distributors through mobile platform. Given the need for creation of investor awareness and Distribution expansion, we have created a separate vertical to bring in high level of focus in both planning and execution. This we believe will bring a single-minded focus to bring the necessary success. To sum up, we as an AMC we have has done exceedingly well in the last 5 years through our delivery of right product, excellent performance, well-crafted service quality and in-turn, better experience. We are working closely with Distributors and the Advisory community in our journey to increase customer base and also activate more and more distributors.

Brief us about your personal investment philosophy?
My investment philosophy is simple focus on generating long term growth by keeping the investment philosophy Simple, Disciplined and never be greedy. With this approach, I continue to keep the simple instrument such as SIP to build size in equity. I am a believer that equity as an asset class will give return over a period of time, however, one needs to have patience to benefit out of such investment. Secondly, I believe in investing in Real Estate selectively. So far, I have been having the philosophy of taking care fixed income investment through Provident Funds and Super Annuation Fund. However, as one ages, ones starts realizing the need for more fixed income investment to have steady income. Based on this, I have started focusing on asset allocation between equity and fixed income schemes through SIP route. Ultimate aim is to generate balanced growth in everything that I do.

A Balasubramanian is the CEO of Birla Sun Life Asset Management Company (AMC).