Despite sustained equity folio closures, recent subscription trends indicate that investors have started looking at MFs again, says Anutosh Bose, chief operating officer, LIC Nomura Mutual Fund. Bose says the fund house has strengthened its sales force and taken steps to reach out to old partners again, be it individual ARN holders or distribution houses. In an interview with Ashley Coutinho, he says the investor education programme will help investors take informed decisions. Excerpts:
Equity markets have seen a significant uptick since September last year, yet we see sustained folio closures in equity schemes. Will we finally see MF investors coming back?
Equity markets have moved up in the recent past primarily due to the election result anticipations. It is natural for an investor to book profit after waiting for the markets to improve. With improvement in technology usage and ease of investment, the multiple folios have seen consolidations to some extent. Both these factors have contributed towards reduction in folio count at the industry level. The recent subscription trends indicate investors have started looking at MF investments again and soon we may see more signs of revival of investor interest.
What are your plans as a fund house for the year ahead?
In last two years, we have taken steps to strengthen our process and practices that have yielded an above-industry average growth in our AUM. We want to retain the momentum to achieve AUM levels in 2-3 years that we had in the past.
How are you ramping up your distribution network?
We have taken a multi-pronged approach in this area. Apart from strengthening the sales force, we have taken steps to reactivate our old business associates and partners, be it individual ARN holders or distribution houses. We have seen a significant revival of interest among our partners who deal with multiple-financial products and are part of the LIC network. Additionally, there is a traction with the help of new distributors.
What are your views on Sebi?s seed capital, AUM disclosure and voting disclosure requirements? Do you think the net worth requirement of R50 crore will hamper innovation?
World over, the regulators create a healthy, transparent and fair business environment, ensuring rights of all the participants. The recent steps taken by Sebi are in the same direction. Sebi?s intention is to ensure a competitive environment for the MF business, ensuring protection for the investors.
With the market regulator giving incentives for inclusion, how are you expanding your reach beyond the top 15 cities?
We have an advantage, due to our parentage and the network within the setup. Regular interactions, investor education and adoption of districts have given positive outcome. This has contributed in the AUM growth.
What is your advice to the MF investors at this point of time?
Many investors are not aware that MFs have many schemes to meet their requirements. Investors should choose the scheme best suited to their needs at that point of time. For example, if an investor is not comfortable with equities at a particular time, he can invest in debt or balance funds or liquid funds and then switch over to equity when he wants to. Investor education programmes will help in taking informed decisions and result in active participation.
