Currently, retail accounts for just 35 per cent, with the lion’s share of 65 per cent of the AUM accounted for by institutional investors. This fund house has total AUM of about Rs. 25,000 crore as on date.
“Our aim is very much to grow our retail focus. We have already created the foundation and now we will be building on this,” Rajesh Patwardhan, Chief Marketing Officer, LIC Mutual Fund, told BusinessLine .
In retail, the prime aspect will be the performance of equity funds, and the fund house has started focusing on it
“While our equity-related funds have grown, it has grown relatively lower than our debt funds. For any fund house to come to the big league, you have to first grow your debt funds,” he said.
Of the existing AUM of about Rs. 25,000 crore, the equity book is Rs. 2,200 crore, with the rest being debt-oriented funds.
Eyeing B-15 investors
“Our aspiration is to grow our equity book to 12 per cent of the overall AUM. Today it is 9 per cent. Next year, I am eyeing equity book of Rs. 3,200 crore on the back of my AUM growing to Rs. 35,000 crore from Rs. 25,000 crore now,” Patwardhan said. Much of the equity assets for LIC MF are expected to come from the B-15 (beyond top-15 cities) and for which the fund house plans to work closely with IFAs and LIC agents.
“Our objective is to move more into B-15, because that is the place which has not even tasted equity. These B-15 customers are more habituated to regular flow of monies through savings products. They want regular income. So, we have tried and coined our balanced fund that gives out regular dividends,” he said.
The objective is to push equity funds, but with an understanding that this is a high-risk asset and one would have to stay invested for a longer duration to receive benefits from the investments.
“You cannot just play with it… come today and go tomorrow. It (equity investments) cannot be a playing game,” he said.
LIC Mutual Fund expects at least 15-20 per cent growth in Nifty 50 in the next three quarters. “Our general belief is earnings should catch up. Because the rural economy is expected to play better… other than (the) South,” he added.
Patwardhan said demonetisation has benefited the MF industry given the gush in money flows into the banking system.
“For LIC Mutual Fund, demonetisation has been beneficial. The overall environment for investing in mutual funds has become better. That is why you are seeing the mutual fund industry size grow,” he said.
Meanwhile, to enable retail investors smoothly buy MF schemes via their smartphones, LIC MF plans to launch a mobile app by mid-May, Patwardhan said.