The year 2017 will go down as a defining year in the history of the Indian mutual fund industry. More than half of the industry AUM is now owned by individual investors. This would mean that mutual funds are finally beginning to reach the rightful segment. It was also a year which saw the build-up of what can become a powerful investing habit of the nation - SIP. We also saw the industry folios of the smaller cities overtaking those of the bigger cities. The number of investors preferring to go through the paperless route is growing at a fast pace.
It was also a significant year from the perspective of broad-basing of mutual fund distribution. The emergence of registered investment advisors and online distributors added to the traditional distribution vertical. We saw a distinct shift towards goal-based investing and this will augur well for the investors in their investment experience in coming times. I feel it is a business of advice and I see immense growth for distributors and RIAs in the coming times as mutual funds are slowly becoming the go-to product for more and more investors.
USP of investment strategy
We have a very high emphasis on primary research, meeting managements, doing plant visits and developing our own models for companies under our investment universe. We have fairly diversified portfolios and we believe performance of the fund shouldn't be driven by the performance of a few stocks but the entire portfolio of stocks. This risk-management process has worked well for us as we have avoided big causalities and delivered consistent returns across market cycles.
Impact of SEBI's reclassification
We have always been a one-fund-per-category fund house. Hence, the SEBI reclassification was a further reaffirmation of our business process. We welcomed it and were one of the first fund houses to complete the process. Since we had distinct funds, we did not need to merge any of our schemes. We have seen consistent AUM growth in all our funds post classification, too.
Becoming more investor-friendly
To provide good investment experience, one has to be able to build good and strong products. As a fund house we are dedicated to doing that.
We continue to invest in our website in order to make it more investor-friendly. We have introduced a distributor friendly 'Distributor Initiated Transaction' mechanism which makes online investing seamless for investors through their distributors. We are also in the constant process of increasing our back-office capabilities to be able to answer customer queries competently.
Lastly, we would like to communicate to all our stakeholders in a simple yet consistent manner.
This article was originally published on December 18, 2018.
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