As India's first direct-to-investor AMC, we believe our strength is in the ability to challenge the opaque distribution system and offer our investors a transparent investment avenue. When it comes to weaknesses, it is our limited reach. We are now focused on being more visible with strategic-marketing efforts. One thing that is both a strength and a weakness is that we have only a few funds to offer. That is a strength because we don't believe in cluttering our investors' portfolios with clone funds. It's a weakness because we are yet to offer something along the lines of a balanced fund.
From the business perspective, the challenge is to increase the reach of Quantum funds across India - not just tier 1 cities but also tier 2 and tier 3 cities, where internet penetration may or may not be as desired. Further, we are also focused on the retention and nurturing of talent. Also, the passing of the GST bill might add up to the cost of compliance and increase the tax rate on management fees, potentially lowering the fees received by AMCs.
From an investment perspective, I believe the capital-adequacy norm for net worth should not be applied to mutual funds as they are merely a pass-through medium.
There is a continuous effort to keep innovating and simplifying processes by using new breakthrough technologies. We have also created a maker-checker system, wherein we re-check all the activities that fall under the bracket of KYC, bank-account verification, POI and POA validations, etc.
We have always believed in being a low-cost mutual fund by offering one of the lowest expense ratios. We have a few offerings simply because the cost of one product cannot be ideally subsidised from the income of other existing products. We have promised our investors to reduce costs as and when it is possible for us and we are sure we will do it. Hopefully very soon!
With one of the first completely paperless invest-online section, Quantum has recently pioneered self-IPV that makes the e-KYC process easy. We have also enabled transactions through SMS, WhatsApp and Hike.
Outlook for equity, debt and gold
There could be a sharp jump in listed companies' profits around the corner. This will result in better fundamentals for equities. When it comes to gold, if the market assessment of no-rate hike remains correct, it would be extremely bullish for gold. We expect debt markets to be range-bound in the current financial year.