|
WF: How has 2015 been for Union KBC? What have been the significant achievements during the year?
Pradeepkumar: Calendar year 2015 turned out to be an exciting and successful one for Union KBC Asset Management Company Pvt. Ltd. (Union KBC AMC). On the business front, despite difficult market conditions, we have been able to increase business. During the year, we were able to further deepen our penetration in the retail segment through new business tie-ups. Our Systematic Investment Plan (SIP) book and the number of folios increased significantly. In fact, we managed to more than double the SIP sales. We have also strengthened our institutional business and have added many new clients.
WF: What more would you ideally have liked to have accomplished in 2015?
Pradeepkumar: We are still relatively a young company and there are a whole lot of things that we need to accomplish. It is a journey and we would like to cover more distance in 2016 than we did in the past. However, some of our fundamental objectives such as reaching out to more investors, bringing in new investors to the industry, offer products that have clear value proposition etc. do not change.
WF: 2015 has been a good year for the industry in terms of increasing its retail reach, but a challenging year in terms of delivering returns. What is your business and market prognosis for 2016 and what will be the key drivers?
Pradeepkumar: With the progressive changes and efforts made to promote investments in mutual funds through ease to invest, investor education etc., by the overall industry, we are confident that there is a bright future for the Mutual Fund industry.
Global concerns have rocked the capital markets across the world and we are no exception. However, historically whenever we have experienced such market conditions, we also witnessed market achieving new highs subsequently.
Generating new business during 2016 is going to be difficult and painstaking due to market conditions. However, according to me such times need to be used to enhance your investor base by reaching out and educating them about mutual funds. Investments in difficult times are likely to produce good returns.
WF: With increase in retail penetration and enhanced flows, are we now seeing healthier flows across the industry or do you continue to see polarization of flows into the large fund houses? Is there enough breathing room for everyone, or will we continue to see consolidation amidst industry growth?
Pradeepkumar: Increase in retail penetration is evident from the rise in percentage of industry Assets Under Management (AUM) held by individual investors, which grew by 19.2% during 2015. However, we have seen incremental business being polarized towards the larger fund houses. It is my belief that there is enough room in the market for all players to grow. Given the geographic spread of our country and the vast part of the population that is not exposed to mutual funds at all, we probably need 100 mutual funds to achieve the desired level of penetration.
We were always clear that we would not compete with the larger fund houses. Our strategy has all along been to carve out our own niche. There is no change in that.
I believe that product differentiation and distribution reach will be the key factors in times to come.
WF: There are many new dimensions that are work-in-progress in the regulatory arena which can materially influence the industry - including simplified KYC, advent of e-commerce platforms, the Sumit Bose committee report, reduction in expense ratios - to name a few. In 2016, what key regulatory developments do you see fructifying and how do you see these impacting the industry?
Pradeepkumar: According to me simplified Know Your Customer (KYC) and digital outreach will be crucial going forward. Extensive paperwork always puts off potential investors. We need to find ways to reach out to more and more people and make it easy for them to invest in mutual funds.
While the e-commerce platform is a great idea, we need to balance it against the need for retail investors to have proper investment advice while taking investment decisions. I am sure that the regulator will strike the right balance in this matter.
WF: What are your business plans for 2016? What new initiatives are you considering in the products, sales and marketing spaces for 2016?
Pradeepkumar: On the Product side, we work on a feedback model, wherein feedback from our distributors forms the basis for our product development. We will focus on offering the right product at the right time to the right client.
We are working on our business plan for financial year 2016-17.
The views expressed or statements made in this document are purely the views of the author and do not necessarily represent the views of either the Company or its affiliates.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
Share this article
|
CEO Speak