MFs Gear Up To Lure Retail Investors In Semi-urban Areas

Mumbai, December 22: | Updated: Dec 23 2002, 05:30am hrs
With plentiful returns coming in at both the debt and equity end, Mutual Fund (MF) players are cashing on the good times, as they gear up to lure to retail investors from semi-urban areas countrywide, in the forthcoming calender year.

Said Mr Krishnamurthy Vijayan, chief executive officer (CEO), JM Mutual Fund: In the last couple of months we have concentrated on retail investor segment in the semi-urban areas of Maharashtra, Madhya Pradesh, Gujarat and Goa. The response has been tremendous so far as we have had net investment attune to as much as eight crore from the retail investor segment, in such a short span of time.

Boasting of a 65 per cent retail presence in its current corpus size, making it the second ranking in terms of retail participation, only after Unit Trust of India (UTI), Mr Manavjeet Singh, senior vice president, Product Development and Marketing, SBI Mutual Fund opined: We are currently concentrating on smaller towns, with regards to retail participation following considerable penetration in the metropolitan cities. We are present in 60 cities countrywide and have all good intentions of furthering our reach in smaller towns.

To this effect we have recently hired an agency to train the MF intermediaries who in turn shall be enabled to disseminate the right information and subsequently the right product to the potential retail investor, he added. Awareness of the retail investors has been our point of focus because the retail investor may not be aware of the difference between a debt and an equity scheme. We advise our customers to have a balanced portfolio only after he has recognised his own risk appetite, he also said. For instance for an investors showing interest in equity-based products we would advise that index is the first step to move in equity and then diversified and finally depending upon his appetite the sectoral funds, he explained.

Mr Pankaj Razdan, senior vice president and head, Sales and Marketing at Prudential ICICI Asset Management Company, however had a different tale to tell as he opined From the very inception of the mutual fund industry, all MF players have done their utmost to attract retail investors. However the mammoth corporate participation in MFs over the last two years in order to get good returns has overshadowed our efforts to get retail investors to participate. It is in times like this when all is going well with the MF industry, that our efforts in this regards are consolidating into participation from our target audience, he said.

Retail investors constitute nearly 40 to 45 per cent of our current corpus size, spread across 34 cities in the country and we attribute their participation to the implantation of our four way matrix comprising of the right product mix, a strong distribution channel, operational efficiency and integrated marketing communication which has nearly doubled retail participation in a time span of two years.

Prudential ICICI has made conscious efforts in the area of investor education as well as the training of the distributors. At the PRU University we conduct a specific training programme to aide aspiring intermediaries to clear the Amfi certification, following which we carry out special training programmes in financial planning and understanding of capital markets, to ensure the credibility of our distributors, be it a broker, a sub broker or merely Amfi certified financial advisor, he informed.

Although retail investors are typically fond of the debt segment, they seem pretty enthused about equity schemes of late given the current rally in the market, he added.

Our Dynamic Growth Plan, on the equity side has been been particularly successful with the retail investors, he also informed. As happy times continue to prevail in the mutual fund industry, fund managers are of the opinion that true consolidation of the industry shall only be a reality with the participation of the retail investor who expresses his confidence in the mutual fund industry by investing his savings in a mutual fund.