Choppy markets and a dent on assets under management (AUM) have forced the mutual fund (MF) industry to look beyond the metro cities. They are now on the prowl to grab a share of the semi-urban and rural markets across the country.
In a bid to expand its reach in the country, UTI Mutual Fund (UTI MF) is going to set up over 650 outlets in the next 6-8 months. Of these 650 outlets, 200 will be UTI Financial Centres (UTI FCs) and the other 450 will be UTI franchise offices in all major districts of the country.
Also joining the fray are Birla Sun Life Mutual Fund (BSLMF) and Reliance Mutual Fund (RMF) which are set to open 100 outlets by March 2009 to promote their mutual fund schemes.
July was a bad month for MFs, with AUMs slithering for the second successive month and declining over 6%. The unstable markets have also kept investors away from funds as they wait for the markets to stabilise.
Reliance, ICICI Prudential, UTI MF have all witnessed declines in AUM last month. The expansion of reach to touch more potential investors and efforts to increase awareness of mutual funds as a safer investment avenue have, therefore, become a priority for these fund majors.
Debashish Mohanty, country head ? retail sales, UTI MF, said, ?Our main aim is to promote and educate investors on putting their in MFs. We are going to set up 450 UTI franchise offices in all the major districts of the country, which will train people and where we will be promoting and selling UTI MF. In the rest of the 200 UTI FCs, we will look after the mutual fund and portfolio management services (PMS).?
ICICI Prudential Mutual Fund, on the other hand, has already opened over 245 centres in different cities in the country in the last three months. Senior officials from the company said, ?We want to penetrate in all the parts of the country. In March this year, we had outlets only in 80 cities, which increased to 245 centres by July. We are not going to slow down the speed of opening the outlets, but we don?t have a specific target.?
Anil Kumar, CEO of BSLMF, said, ?Till now, we had only over 30 branches but by March 2009 we are going to open 100 more. Our main aim will be to educate investors how MFs can become another asset class. In all the centres that we are planning to open, we will be providing education programmes and awareness regarding MFs and its importance as an investment mechanism.?