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Investor behaviour can many times be confounding. “You can describe it as schizophrenic!” says Srikanth Meenakshi, Founder & Chief Operating Officer, FundsIndia.com, a premier platform for online investments in mutual funds.
He should know — given the role he plays as an intermediary in channelising investor savings into mutual funds.
Providing an example that he described as emblematic of many an unwary investor, he said that an acquaintance shifted out of ‘risky’ mutual funds and bought himself a flat a few years ago. The same investor approached him recently to seek his advice on investing in an‘ICO’ or initial coin offering! (ICO is a kind of a crowd-funding using crypto-currency, which is currently experiencing the type of speculative surges that took place during the tulip mania.) This may be an extreme example but there are hundreds of others who happily bet their money on far riskier investments such as commodity options as compared to the relatively ‘sedate’ returns offered by mutual funds. “Very few want to take the middle path,” he said.
Handling these kinds of investors as well as those who struggle with financial literacy or numeracy issues are all in a day’s work for Srikanth.
The past two years have been hectic but satisfying. Two years ago his platform had 70,000 investors with assets under management (AUM) at ₹1,200 crore. Now, they have about 1.5 lakh investors on the platform with AUM of ₹4,800 crore. He said, “We are growing at a clip of about 6,000 new investors a month. We are processing about 2.5 lakh SIP transactions a month.” Many other businesses would kill to get those numbers in such a short span of time.
‘Salad days’These have been salad days, he agrees, noting that they have ridden the mutual fund wave of the past two years. He also readily concedes that they have benefited from the advertisement campaign organised by the mutual fund industry, especially the ‘Mutual funds sahi hai’ series. The reputation and credibility built over the past few years on FundsIndia’s advisory and research side has also helped them capitalise on the opportunities, he said.
Srikanth is however cautious, self-deprecatingly putting it down to his ‘conservative’ background. He notes that even at their current size, FundsIndia is much smaller than even 1 per cent of the industry size of nearly ₹22 lakh crore of AUM. FundsIndia will need to grow at 100 per cent year-on-year for a couple more of years before it reaches a size that will then enable it to consolidate, he said.
His immediate target is to get 10,000 investors a month with four lakh SIP transactions and ₹100 crore inflow every month through SIPs.
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