SBI Mutual Fund manages assets in excess of over Rs.6.28 lakh crore. In fact, you are much ahead of your competition. What are the three things that has helped the fund house achieve this?
It has been a very exciting yet humbling journey for us. Getting to the top was not easy and staying there has been even more challenging. But we have been supported by all our stakeholders in this journey – be it our employees, our partners and our investors.
The mutual fund industry has touched the tip of the iceberg in terms of its reach. Our aim over the years has been to increase our presence across regions and reach cities, towns, and rural centres that are financially underserved. In the last one year, we have managed to garner participation from 93% of the pincodes in the country during the various fund launches, with increased participation from B-30 cities.
Our parental heritage along with the SBI MF brand has helped us reach out to more and more investors. At present, our branch count stands at 250. Further, our multimedia and multilingual approach in our communication strategy has also brought in investors from across the country adding to our overall AAUM. Secondly, the performance of our schemes across categories has also been a big draw over the years. Our investment team is doing a tremendous job in ensuring that our schemes consistently delivering returns better than those of the benchmark and the peer-set, reinforcing the SBIMF brand credibility in the market.
Thirdly, while the markets have also grown, participation in equity funds from investors has also seen significant rise. But the category that has really grown has been the hybrid category. As of December 2021, our AAUM under hybrid fund category alone is about Rs.91,000 crore (USD 12bn). Given the volatility in the market in the last few years, conservative and new investors have preferred the hybrid category for its dual benefits of capital appreciation and downside protection. Additionally, we have been expanding our offerings across various categories. Today, we have a wide range of financial solutions offerings catering to varied investor categories, financial goals, and risk appetites. Our product basket can address all the different financial needs arising in an individual’s journey towards financial freedom. And lastly, but not the least, other factors such as the growth of our digital assets, robust investment framework and our after-service capabilities, among others that have led to strengthening of investor trust in our brand translating to a higher AAUM.
What is your roadmap for SBI MF for the next three years?
We want to be the asset manager to every Indian. Our plans remains much the same as it has always been – to expand our reach, offer financial solutions to address investors’ growing financial needs and improve investor awareness. To begin with, we plan to expand our branch presence and promote our digital assets in areas, which are comparatively financially underserved. The aim is to capitalise on the high internet penetration in the country. We already have our digital assets in place for bringing in untapped investors on board. Financial goals and needs are constantly evolving and are no longer plain vanilla. Our focus is to expand our financial solutions basket to fill the gaps in financial planning and address the evolving needs of investors. Further, given the volatility in the markets which have been witnessing for a while now, our aim is to position hybrid funds category as an effective and efficient way of managing volatility, especially for new investors. Hybrid funds aim to offer dual benefits of capital appreciation and capital protection. We have been reinforcing our focus on hybrid funds and will continue to do so in the future as well. And of course, investor education has been one of our key initiatives. We will continue educating investors not just about mutual funds as an investment avenue but also about the need for and the important tenets of financial planning.
How are you going about increasing your engagement with distributors?
Distributors are an essential part of our ecosystem. It is through MFDs that we are able to reach to smaller investors and increase reach for financial products. We conduct training programs on an ongoing basis to train distributors about different funds, markets and other technical aspects of different asset classes. Further, we publish our communication materials in varied languages as communication in regional languages enables easier understanding for distributors and investors who are not very well versed with English or Hindi. We have also created digital assets for distributors to provide them with a seamless and convenient investment experience and we have continuously enhanced these digital touch points to stay up to date with their changing needs and requirements.
What trends do you think MFDs/RIAs should watch for in 2022?
One of the mainstays of the role of MFD’s will be to ‘’sell simplicity’’ to investors by ensuring their investors do proper asset allocation and avoid over diversification. Moving from products to offering solutions for investor life goals will be critical. As the mutual fund reach widens across the country, MFDs will have to cater to a much larger community of investors, play a bigger role in on-boarding new investors and educating these new as well as existing investors.
Market expansion with a focus on reaching out to millennials will be a very important role MFD’s have to take on. The role of digital as an enabler will continue to rise and MFDs must adopt DIY methods for servicing their customers. Adopting digital with a focus on ensuring convenient and a seamless investing experience for investors should be the way ahead. With products and financial needs becoming more complex, many investors see merit in paying for well-researched and well-informed advice. So, both RIAs and MFDs will need to reach out to investors and help them make prudent investment choices. One thing they must understand is that they can reach the last mile in terms of financial inclusion and hence they could play a very big role in the financialization of savings. Further, investors now in the digital era are flooded with information and one trend we have been seeing in the recent past is investors taking hurried decisions to change their investments based on short-term performance or any market action. Both MFDs and RIAs thus have their task cut out in terms of managing investor behavior and guiding them correctly.
SBI Mutual Fund has launched Sanjeevani Awards 2022 along with Cafemutual. What is the rationale for this and what is Sanjeevani Awards 2022?
Over the last 18 months, many MFDs have gone out of their ways to help clients overcome difficult situations in their personal lives. In fact, many MFDs have helped families who suffered in some way or the other due to covid-19 pandemic. The Sanjeevani Awards 2022 are meant to encourage and recognize their selfless contributions in supporting people during these most challenging times.
