At ICICI Prudential AMC (IPAMC), we have ensured complete investor centricity and investment centricity. We have built diversity within the fund house by offering a variety of investment strategies. In fact, we have a culture where fund managers are encouraged to develop their individual styles but at all times these have to be practised within the overall investment framework. Also at IPAMC, fund management is not about having star fund managers but rather strong processes in place.
The fund house has clearly defined internal processes on every aspect of fund management. Harnessing technology across processes of the organisation has also been a key enabler to improve productivity and effectiveness. We keep a track of 'happy customers' to know how satisfied our investors are. We believe that a fund house managing money well is bound to attract more investments.We are focused on creating awareness through right communication channels to bring about a positive behavioural change amongst individuals when it comes to investing.
Challenges ahead
Going forward, the markets are likely to be volatile. In such an environment, it is important to be able to maintain investors' confidence because a general tendency of Indian investors is to pull out money when the markets are volatile and invest when the markets are surging high, which may not necessarily lead to the best investment experience. Thus, we believe investors should look at hybrid/defensive strategies which prudently pare holdings in equity when the stock market is rising and increase allocation to debt and bonds.
The need of the hour is to move away from selecting products based on short-term/previous year's performance and look at other important parameters like pedigree of the fund house, consistency in long-term performance and risk management.
If the short-term performance of a fund is not good, it may be a suitable time to invest in it. For example, in 2013, when markets were underperforming, we encouraged value-oriented equity investing. It is important to note here that value investing does not always outperform over shorter time periods. It tends to work over cycles.
Competition
We believe there is enough diversity and competition in the mutual fund business. But to sustain and grow the mutual fund industry, it is important for the existing AMCs to invest in the business to build reach. The regulatory landscape is built in such a robust manner that only fund houses performing well will be able to sustain. Therefore, one also has to create a long-term track record to ensure the trust of investors and distributors. In fact, we call it trust record rather than track record.
Retail reach
On the retail side, we believe that every individual who has a bank account should be an investor with us.
This article was originally published on November 19, 2015.
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