Congratulations on becoming the top fund house in terms of quarterly average AUM. What are the factors that have worked in your favour?
The factors that worked in our favour are strong network of individual MFDs, extensive distribution and reach of State Bank and SBI MF’s brand value.
Moreover, performance of our equity funds have played a major role in retaining clients.
How do you plan to retain your position?
We don’t need to do something out of the box at this point. We are looking to continue our consistent performance across schemes, deepen our engagement with distributors and leverage SBI’s strong banking channel and trusted brand value to reach out to investors.
Around 56% of your total AUM comes through the direct route, nearly 22% comes from SBI and the rest 22% from non-associate distributors such as NDs & individual MFDs. Going forward, how do you see this breakup evolving?
If you take out the inflows into our ETFs that we get from the government run EPFO, contribution through direct route stands at around 30% of our total AUM. We are also trying to get more institutional players to invest in our debt funds to increase our business through direct plans.
On the retail front, yes we welcome flows through the direct channel, but we are focused on strengthening our individual MFD network. We are looking to conduct more value addition sessions and training programs on the latest technologies, industry best practices and so on to support distributors.
In addition, we have increased our engagement with many distributor associations across the country through webinars.
While you have emerged as the top player in B30 cities, you have some catching up to do in T30 cities. How do you plan to increase your assets in top cities?
In B30 cities, SBI’s strong banking channel has worked in our favour. Also, many distributors in these locations have been recommending our products due to strong performance. This is why we garner around 22% of our AUM from B30 cities, which is higher than the industry average.
In T30 cities, we are among the top 3 fund houses. We will open more branch offices of SBI MF in T30 cities to increase our penetration further.
Some media reports suggest that SBI MF is set to get listed in the stock market. Could you throw some light on this development?
Yes, we will get listed. However, given the current market scenario it is difficult to say if we will get listed in next 6 months or 12 months. Whenever we feel there is scope to get reasonable valuation, we would initiate the process.
How will the covid-19 pandemic impact business of SBI MF and the MF industry?
We have witnessed around 15-18% fall in our equity AUM last month. I think the MF industry has also seen such a downfall in equity assets. A rough calculation says that Rs 5 lakh crore was wiped out of the MF industry last month.
What should distributors do to deal with this pandemic?
Distributors who rely on physical transactions have been affected significantly. Therefore, the lesson from this crisis is to move to digital transactions as soon as possible.
Further, distributors should also look to diversify their asset allocation to debt funds that would reduce the downside risk and enhance returns especially in times like this.
