I believe one of our biggest strengths is our brand name. Secondly, our comprehensive product bouquet offers a wide choice to investors and is complete in most respects. Another strength is our extremely well-experienced team to manage the respective functions. We have been expanding our geographical presence to almost 60 cities.
As far as our weaknesses are concerned, we are a relatively new player. In contrast, our peers have been around for more than 15-20 years and have been more established. Having that said, we are amongst the top 15 players in the mutual fund industry. Another weak area for us is that various distribution entities prefer longer track record for mutual fund players. Not being in the industry for long does work against us at times, but given our strong fund performance this is not a big deterrent. Lastly, we do not have an international presence as compared to some of our competitors.
Challenges
From a business perspective, a key challenge is bringing a larger number of investors to invest in mutual funds. We have run investor-awareness programmes across the length and breadth of the country, both in English and in the regional language of respective cities. We are also engaging with non-mutual-fund investors/first-time investors, and in smaller cities we have been working with distributors and local trade bodies that are keen on increasing awareness and education on mutual funds. This, I believe, should help in the long run. Another challenge is that the number of active distributors is roughly 15,000, which makes penetration of mutual funds very low. As such fewer people are covered vis-a-vis insurance. On the investment side, till the economy does not kick off or grow, increasing volatility on account of global factors will continue to make managing investments that much challenging.
Competition
In a developed market like the United States, there are thousands of mutual funds, each having their own niche and specialty and catering to a large investor base. In contrast, India only has 44 asset management companies. I believe that as the market grows in size and investor base, we could see more players entering the mutual fund industry.
Retail reach
As a business, growing the retail reach is one of our key focus areas. Retail assets bring in many benefits such as longevity of assets and stability to the portfolio. We are now in close to 60 cities and will be opening few more branches in this financial year to expand our presence. We believe that mutual funds are a convenient product for any individual investor; they give you all benefits of flexibility and choice of investments, liquidity and reasonable post-tax returns. Every investor should invest in mutual funds and that too for the long term.
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