The domestic Mutual Funds (MFs) are aggressively expanding their distribution network in the non-metro cities to tap retail interest and lure the retail investors to invest directly into the various schemes offered by the fund houses. The retail investors can avail the waiver of the entry load by investing directly into these branches of the fund houses in case the Securities and Exchange Board of India (Sebi) enforces its proposal in this regard. The Sebi has proposed to offer waiver of entry load for direct investors – the ones who invest through internet or direct distribution centres of the fund houses.
UTI Mutual Fund has, on Tuesday, already announced its decision to open seven new UTI financial centres (UFC) in B and C class cities – Jamnagar, Bhavnagar, Udipur, Jallandhar, Mysore, Kota and Warangal. Explaining the fund house’s future plan, Jaideep Bhattacharya, chief marketing officer, UTI MF said, ?We plan to expand our operations from the present 72 to over 150 UFCs in 500 districts including in B and C class cities in next one to one and half years. In case of Asset Management Companies (AMCs), brick and mortar strategy still works as investors like touch and feel good factor”. The fund house will give both the choices to the investors – direct as well as distribution model.
Another fund house, Birla Sun Life Mutual Fund, has doubled its network in non-metro cities in the last six months. Raghvendra Nath, vice president-marketing and strategy, Birla Sun Life MF said that it had increased its branch network from 25 to 50 centres. The fund house has opened its new branches on distribution model in towns like Jamnagar, Agra and Raipur. “We plan to open a few more branches in non-metros in the current financial year”, he said.