Our single point agenda is to make SIP the religion of our company. We think that market cycles and business cycles are very difficult to predict, so the way to get retail investors, even high-net-worth individuals, is SIPs. We are still the clear market leader in the SIP business and that has been our strategy over the years.
Every month we are getting new registrations which are increasing our market share. I believe we need to have simple products which give above-average returns consistently over long periods of time.
Challenges
The people who make policies are sensitive about the role the mutual fund industry is playing. Particularly in the last few months, we saw a one-sided $1-2 billion sale by FIIs being backed by $1-1.5 billion buying by mutual funds. So, the mutual fund role is beginning to get attention it always deserved.
From an investment perspective, we have to be respectful of our limitations in predicting markets. We should be humble enough to accept the fact that we do not have that capability to predict market levels and things like that. As you can see, in the last few months, most of the so-called experts of this industry have not got the key events of the markets correctly. No one talked about China devaluing and rocking the market.
In 2008, the reasons for the crisis were different; the challenges were different. We are not anywhere near a crisis. So fundamentally, if you ask me, we are very optimistic. We believe both fixed income and equity will provide significant opportunities for upside in the market.
Competition
I think one thing that we, as an industry, have not done much is digitisation. I think as an industry we have not embraced technology in terms of distribution as much as we could have or should have. We only boast of AUM.
There are revolutionary changes being worked upon by the National Payments Corporation. So, if you look at the work that is being done by the NPCI, I think the way in which mutual fund transactions can be done can change dramatically.
Retail reach
The key ground on which we would want to sort of leapfrog into the next phase of growth in retail reach would be technology.
The digital revolution in retail reach is not something that will happen in 2018; this could happen before the end of 2016. So, some of these changes will overtake us if we are not ready and will bypass us as an industry if we don't embrace them in time.
This article was originally published on November 18, 2015.
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