With low penetration levels coupled with climbing growth rates, the Indian mutual Fund industry is all set to unleash its true potential. by Manish K. Pandey
But then one should not forget the MF industry is poised to face tough competition from the insurance sector in the near future. Raison d’etre: Insurance companies in India have developed innovative products which link mutual funds and insurance, like unit linked insurance plans. Thus, innovation in terms of product offerings customised for these new target segments will be essential if MFs want to compete with these innovative insurance offerings. For instance, UTI’s plan to sell products through the postal channel targeting the retired population is a move in that direction. No doubt, the recent turmoil in stock markets has shaken investor confidence, and investors are apprehensive about investing in equity or instruments linked to equity but then niche products linked to infrastructure and real estate funds providing superior returns are likely to appeal to urban investors. Similarly, new products like daily savings plans are likely to become popular among the rural micro-saving segment.
As per Waqar Naqvi, CEO, Taurus Mutual Fund, “Owing to the change in regulations, we may soon see slight changes in the way [AMC] business happens today.” It will actually be distribution that will continue to hold a lot of value for the AMCs in 2010. Most importantly, with banks, independent financial advisors and national distributors all playing their roles, AMCs have to be very careful in choosing their distribution partners. Because those partners will actually be the vehicles riding whom the AMCs can penetrate deeper into the retail segment.
IT’S A TEAM!
While aggregate global MF proceeds are still below normal levels, inflows accelerated through 2009, creating a solid foundation for 2010. As per ICI, MF assets worldwide increased 12% to $20.34 trillion as of June 2009. Net cash flow to all funds was $81 billion in Q2 ‘09, up from $47 billion in Q1. Even net inflows to long-term funds were $293 billion in Q2, after experiencing a cumulative outflow of $607 billion over the prior three quarters. “After a strong market revival last year, fund managers are optimistic about the prospects of 2010,” says Annabel Brodie-Smith, Communications Director, Association of Investment Companies. Now that’s what you call a smart recovery!
Read more......
But then one should not forget the MF industry is poised to face tough competition from the insurance sector in the near future. Raison d’etre: Insurance companies in India have developed innovative products which link mutual funds and insurance, like unit linked insurance plans. Thus, innovation in terms of product offerings customised for these new target segments will be essential if MFs want to compete with these innovative insurance offerings. For instance, UTI’s plan to sell products through the postal channel targeting the retired population is a move in that direction. No doubt, the recent turmoil in stock markets has shaken investor confidence, and investors are apprehensive about investing in equity or instruments linked to equity but then niche products linked to infrastructure and real estate funds providing superior returns are likely to appeal to urban investors. Similarly, new products like daily savings plans are likely to become popular among the rural micro-saving segment.
As per Waqar Naqvi, CEO, Taurus Mutual Fund, “Owing to the change in regulations, we may soon see slight changes in the way [AMC] business happens today.” It will actually be distribution that will continue to hold a lot of value for the AMCs in 2010. Most importantly, with banks, independent financial advisors and national distributors all playing their roles, AMCs have to be very careful in choosing their distribution partners. Because those partners will actually be the vehicles riding whom the AMCs can penetrate deeper into the retail segment.
IT’S A TEAM!
While aggregate global MF proceeds are still below normal levels, inflows accelerated through 2009, creating a solid foundation for 2010. As per ICI, MF assets worldwide increased 12% to $20.34 trillion as of June 2009. Net cash flow to all funds was $81 billion in Q2 ‘09, up from $47 billion in Q1. Even net inflows to long-term funds were $293 billion in Q2, after experiencing a cumulative outflow of $607 billion over the prior three quarters. “After a strong market revival last year, fund managers are optimistic about the prospects of 2010,” says Annabel Brodie-Smith, Communications Director, Association of Investment Companies. Now that’s what you call a smart recovery!
Read more......
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
