We believe that in the last one year many regulatory changes were seen in the fund-management industry. All these would help bring the Indian asset-management industry practices in line with the global standards. Also, the launch of several new innovative products by various fund houses will propel the industry to higher levels and offer diverse products in clients' basket.
The fund-management industry has been endeavouring to provide easy access to investors. It has launched direct plans, promoted the benefits of mutual funds and provided a multitude of options to meet specific investor needs. In terms of liquidity and timely payment, the industry's record is impeccable and it has been able to deliver on all the promises made to investors.
With the reduction in the expense ratio, as mandated by SEBI, the fund-management industry will have to pass on some part of the burden to intermediaries. Consequently, we are going to see some reduction in earnings in the hands of the intermediaries in the fund-distribution industry. However, in our view, given the developing equity culture and more flows into financial assets, the absolute flows should increase tremendously, offsetting lower margin for intermediaries, and in the medium term, they should see reasonable growth.
USP of investment strategy
It has been in our DNA to take lead in all spheres of the financial-services industry. We try to ensure that all our products are unique and differentiated. Earlier during the year, given our view on valuations in the market, we launched a portfolio entirely made of Nifty stocks and hedged that portfolio by buying puts. Given the recent market movements, it has been among the best-performing portfolios. Our endeavour is to identify the gaps in the market and launch products which bridge the gap and offer favourable risk-return profile to investors.
Impact of SEBI's reclassification
We have been managing a multi-cap equity mutual fund and hence the reclassification hasn't impacted us at all, as our portfolio was already in line with the SEBI classification. We are, however, going to launch multiple products during the year and here the SEBI classification will help us to launch targeted products with very clearly defined investment objectives.
Becoming more investor-friendly
As stated above, our endeavour is to offer products which satisfy the requirement of investors. With that in mind, we will continue to launch new and innovative products for our investors. Additionally, we are aggressively promoting direct plans, which will allow investors to access our products at a lesser cost.
This article was originally published on January 23, 2019.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
