Gaurav shares fascinating data on where new investors are investing their money. The good news is that 3.2 cr new folios were added by the industry in FY24, of which 2.4 cr was in core equity funds. The not so good news is that 70% of this (1.6 cr new folios) were opened in small and mid cap funds and in thematic NFOs. In contrast, hybrid funds (ex arbitrage) got only13 lakh new folios, large cap and ELSS got only 8 lakh new folios each.
New money is chasing expectations of high returns –either on the back of past performance (small and mid caps) or the promise of exciting returns (high decibel sales pitches for new thematic NFOs).
There is a lot of work to be done by the industry and its distributors to encourage new investors come into more balanced products to start their investment journey
Canara Robeco crossed Rs.88,000cr AuM in FY24,registering a robust 42% growth over previous year, aided by 2 successful NFOs and significant growth in mainstream funds.
The company crossed its Mission 1 trillion target during the year, including assets under advice from overseas mandates.
The fund house plans to strengthen its hybrids range with a new balanced advantage fund launch during this year.
A key feature of their distribution engagement initiatives have been road shows across the country where not only the fund house’s investment and sales team engage, but also their service partner KFintech. This helps significantly in bridging communication gaps between distributors and R&T agents.
Gaurav’s thoughts for MFDs to build scale and capitalize on this growth wave:
1. Invest in your business: create high quality teams, build robust processes, invest in the right technology platforms
2. Make asset allocation your mantra for all clients
3. Focus on unit growth instead of AuM growth, set and meet targets for new client acquisition
4. Use SWP a lot more – there are so many investors who need cash flow solutions – who can be offered a range of MF options with SWPs set up on them.