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 Vikaas Sachdeva, the CEO of Edelweiss Asset Management Company had to say:
What factors would increase the appetite for investing in mutual funds beyond the top 15 cities?
I think there are a few things we can immediately do. One is that we need to have more advisors and recent steps by Amfi and SEBI to increase the breadth of distributor coverage across geographies is a step in the right direction. This, coupled with investor friendly initiatives like information in regional languages, color coding, simpler products and investor education would be appealing to various strata of investors. Secondly, I think as an industry, we have focused largely on just the utility value of MF products, not the aspirational value. Typically, retail investors tend to look at people who are more successful than them when they invest. I believe a focused approach towards enrolling MNI and HNI clients in MFs will have a cascading effect on attracting retail investors as well, particularly in B-15 centres where information is usually at a premium and they seek guidance from MNI/ HNI investors.
Have the direct plans seen greater retail participation?
This is typically present in more savvy customers, like for example on the institutional side. Net savvy retail investors have been investing direct as well, but it is yet to see substantial re-allocation of investments from the regular plans.
What investor education initiatives has your AMC taken?
AMFI has issued guidelines for the investor education which are our primary frame of reference for our investor education initiative. We have also recently adopted a B-15 centre and have initiated discussions with the local distribution fraternity. While our agenda is to support SEBI's initiatives on promoting financial literacy beyond top 15 cities, our aim is -- in our own small way -- to bring pride to this fraternity in calling themselves “Mutual Fund advisors” the way it is felt in insurance and other allied industries.
What's the road ahead for your AMC?
As an AMC, we believe that we are changing the way people invest, and they way they look at their investments. As an industry, there is a tendency to commoditize investments without looking at other benefits like controlling volatility, adherence to systems and processes provide. Our endeavor is to highlight the same to our investors. To the distribution community, our value add is that we will help them get clients in Equity. We listen very carefully to what our channel partners have to say and are trying to deliver solutions which add value to their investment advice.
Brief us about your personal investment philosophy?
At a personal level and whenever I speak to people tell them to invest in equities and that is what I also do. I believe that, move from physical assets to financial assets has already begun; while many have started moving to debt I personally believe that, there is no better opportunity then equity at this point of time. Risk reward premium is very good and in equity I think it is in favor of quality mid-caps stocks. Going forward midcap funds and stocks can create disproportionate returns for investors and I want to do this. My way of investing is neither lump sums nor SIPs, but I invest in what we say 'pre-paid SIPs'. Whenever there is a fall in market of more then 1 percent, my money automatically moves to equity. I stay in equities for longer duration and avoid short term momentum.
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