The fund house follows a three-pronged strategy - launching unique and sensible products, managing these products to deliver superior performance, and building a strong retail customer base to promote these products to. Over the past year, our investment decisions have ensured that almost all of our funds have become category chart toppers.
Managing return expectations
We have always been very cautious while creating new funds. We do not follow others blindly while launching new products in any categories.
Transparency is a vital part of our selling process, and we ensure that investors buy into our products not simply on the basis of current performance, but by understanding the objective of the specific product, the time horizon of the category and the risks associated with each product. Our entire promotion effort is focused on intensive induction of investors in our funds.
Risk controls
Markets world over are changing. Valuations should be looked at from the point of view of expected growth in earnings of individual stocks in the near future. As long as our fund managers are confident that the selected stocks meet all the internal criteria and cross all the filters, only then are they included in our portfolios. I think we are managing our investment risks fine.
Rising industry assets
Given that the markets are at an all time high, deploying additional funds will be a challenge for all Asset Management Companies. At BOI AXA, we believe there are still stocks and pockets in the market where money can be made. We are very confident of our investment strategy and our ability to continue to deliver value to our investors.
Growing clout of domestic funds vis-a-vis FIIs
Thanks to the influence of domestic institutions, including mutual funds, we have progressed from the times when the Indian stock market see-sawed with FII flows. While this expansion has been driven as much by retail investors as by corporate treasuries, growth in the SIP book is undoubtedly one of the most significant developments which has contributed to mutual funds' influence on capital markets and brought in stable flows. With around Rs 5,000 crore of SIPs flowing into the industry every month, mutual funds are building a robust asset book that would stimulate its long term growth.
Outlook for equity and debt
Political stability, decisive leadership, low interest rates, softening oil prices, world-class managerial talent in the corporate world, strong regulatory framework, reforms in the tax structure, retail investors' propensity to invest in financial products, as opposed to real estate and gold point to a long term growth for the Indian economy. This would attract both foreign and domestic flows into equity and fixed-income products.
This article was originally published on November 22, 2017.
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