The Hindu Business Line : 'Performance is of supreme importance for investors'

BIRLA Mutual Fund has proposed to focus closely on portfolio advisory services (PAS) in the days ahead. It seeks to bring to its fold as many high networth investors - its targets - as possible.

The idea is to showcase, inter alia, the merits of customised portfolios, ones that are tailored to suit each investor's unique requirements.

Mr Ravi Sharma, V-P, Marketing, feels portfolio advisory tools are all set to emerge in a big way in India.

"It will be the next major milestone for the asset management industry," he said. The MF is also nurturing proposals that will add muscle to its distribution set-up.

Excerpts from the interview

How is your PAS positioned at the moment?

We already cater to a number of clients who have chosen us to handle large sums of money. Such clients are offered certain unique services. In fact, there are executives to specifically handle their accounts.

The number of takers for a service like ours is bound to go up in course of time. People are often willing to work day and night to set up enterprise with the hope of creating wealth for themselves.

But, despite having set clear and quantifiable goals, they may not have the time or expertise to tend to their assets in the most desirable manner.

This calls of engaging specialists who are equipped with the right sort of knowledge. This is where we have slotted PAS.

Birla MF has developed an exclusive chain of distributors... .

Yes, this is a concept we have worked on very carefully. The idea is to create a special network of distributors, particularly in the smaller centres, which will complement our other on-going efforts. In the east, for instance, we have earmarked about ten such centres.

Distribution is quickly assuming greater significance in our business and all fund houses are trying to fine-tune their individual systems. We are working on programmes that will help us reach out to a wider audience.

The logic is simple: Mutual funds, which are an expedient way of saving, should be easily available to potential savers.

This very requirement makes the establishment of a well-performing distribution network so crucial.

With equity returns coming down and debt not performing, fund houses are witnessing a slowdown. How do you read the situation?

This may be a transient aspect of our business. Professional investors like us have to live with volatility and regression too.

This affects our performance from time to time. But think of the investor who has made money last year by staying in equity funds.

There are countless other reasons why the asset management industry will grow in size in India.

To state just one of them, allow me to dwell on bank deposits, which are of mammoth proportions in this country. We have just about started to tap these deposits and the potential is huge.

On another front, investors, despite facing the many ups and downs in the market, have started finding value in mutual funds.

I am referring to factors like liquidity and convenience. These will keep us going.

However, performance is of supreme importance for investors.

They will punish the funds that underperform consistently without any apparent reason.

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