Kailash says the most important priority for distributors and every stakeholder who connects with investors is to manage their return expectations, which are running unsustainably high after a huge run up in markets in recent years. Very few are now willing to accept early-to-mid-teens as sustainable long term equity fund returns – it is our job to help investors get grounded on expectations now, if they are to enjoy the fruits of this market over the next few years.
India’s SIP story has indeed become secular – a huge change from its erstwhile cyclical behaviour. All the good work done over two decades by the industry and the entire MF ecosystem are paying off, as is visible in every correction.
There is a marked dichotomy in investor behaviour between SIP and lumpsum investing – they are willing to look at long term disciplined investments through instalments in funds with strong track records, but lumpsums are still going into “10 rupee” funds focused on trending themes and sectors. Fact is these NFOs – like SIPs – are also bringing in huge numbers of new investors into the industry. We need to engage all these new investors inbuilding awareness of the range of meaningful solutions we can offer them beyond NFOs.
HSBC MF has completed 2 years since the merger of L&T MF’s funds – a journey that Kailash says has been extremely rewarding. The combined entity is now on the whitelist of most distributors and monthly sales trends are continually looking up month-on-month. Equity performance of the combined fund set is now robust with around 90% of funds in Q1/Q2 and 1 yr and 3 yr timeframes.
Kailash would like to see more traction in his fixed income business even as the team continues to build on the tailwinds of healthy equity performance to grow the equity franchise.
Multi-lingual investor communication (in 6 languages),pipeline of new products, further strengthening of investment and sales teams are all initiatives underway to ensure that the fund house makes rapid strides in 2025, building on a robust performance in 2024.