In an annual review on fund families, we spoke to mutual fund honchos to get their views on some of the pressing issues facing the industry. This is what Debasish Mallick, the CEO and MD of IDBI Asset Management Company had to say:
What factors would increase the appetite for investing in mutual funds beyond the top 15 cities?
B 15 markets are yet small and less acquainted with the concept of mutual fund investments. However, in these days of electronic communication and social media interface, these distinctions are likely to get blurred soon. The markets and the investors therein will become more familiar and open to the concept of mutual fund investment. Product acceptance will improve, and investment modalities will become popular. The investment education initiative being pursued by the AMCs will no doubt help in accelerating acceptance of mutual fund products in these markets. However, as these markets are yet to be initiated, the growth process will no doubt be protracted. This could be the biggest challenge we face in expanding in the B 15 market. With the lack of institutional business and relatively lesser amount of large ticket HNI business, it could be difficult to sustain and grow a vibrant mutual fund distribution set up. The other challenge could be one of finding trained and qualified personnel to market our products in these regions. In short “appetite” is an immediate problem, which would hopefully reduce progressively with the measures being pursued, but the challenge of “reach is likely to linger.”
Have the direct plans seen greater retail participation?
Direct plan schemes of mutual funds are yet to see any significant extent of retail participation. The action has till now has been confined largely to the institutional space. Considering the lack of visibility of the asset management companies, I feel it could take a while before direct investment in mutual fund schemes by retail investors actually pick up.
What investor education initiatives has your AMC taken?
IDBI AMC has decided to focus primarily on direct contact programme with investors in pursuance of the investor education initiatives. We have organized a number of investor camps at various centres, primarily in Tier II and Tier III towns, where awareness camps have organized in partnership with local bank branches, distributors or investor associations. We are working out a detailed programme which would be pursued in Srinagar and Ujjain, the two districts allotted to IDBI Mutual Fund under the Investors Education initiative.
What's the road ahead for your AMC?
IDBI AMC is a new company which have been facing a slow and crisis ridden market since its birth. We are utilising the time to focus on building a complement of products in our portfolio, setting systems and processes in our AMC in all spheres of activities - most importantly in investment and fund management activities , developing marketing reach and network. We are making all attempts to ensure that we become a reliable, trustworthy and process driven fund house so as to cater to the needs of investors. We look forward to the next upswing in the industry with hope and aspirations.
Brief us about your personal investment philosophy?
IDBI AMC believes that mutual funds can be a tool for long term wealth generation, and should not be used as an instrument to generate quick returns. IDBI AMC has accordingly been emphasising on the concept of asset allocation in a prudent manner, between the three fundamental asset classes: Equity, debt and gold as a means to generate long term wealth. My personal investment philosophy corresponds to this. I have been influenced by IDBI Mutual Fund and IDBI AMC has been influenced by me in this regard.
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