The regulator has termed mis-selling as
fraud. Will it be difficult for SEBI to identify mis-selling? What are its
implications for distributors?
We should first let selling to happen! That itself would be a good reason for the industry. Mis-selling is bound to happen in the context of selling. We should identify mis-selling at a very early stage. Mutual funds are simple products but are linked to the vagaries of markets. Despite the risks, investors experience with mutual funds has been good. In our view, it is not so much an area of concern given the fact that industry is still looking at ways and means to expand the business.
How do you see the opportunity for mutual funds in the infrastructure debt fund (IDF) space?
The opportunity is big. IDF caters to one segment of the economy which is large in size. The infrastructure sector needs a lot of money. IDF will take off slowly. IDF will form part of the fixed income portfolio of large investors. Today people also invest in a five-year fixed deposit. The lock-in is same in IDF as well. We have filed an offer document with SEBI for launching an IDF.
We are seeing continuous redemptions from equity funds from April. What is your advice to investors?
Redemptions are a function of asset allocation. Sometimes people readjust their portfolios. It is also a function of lack of confidence in their asset allocation pattern. Redemptions are also a function of people frequently tracking their portfolios, which is not a good sign. At a time when inflation is high one can’t ignore equity which is the only asset class which beats inflation..
Is there a big opportunity for MFs in RGESS? Are you planning to launch a new fund to take advantage of RGESS?
A couple of our schemes are eligible for RGESS. We are in the process of rolling out these schemes for a larger participation.
Right now, our focus is on both RGESS and ELSS. The population who earn less than Rs 10 lakh is huge. We will leverage our extensive distribution network to take the lead in building a size in RGESS.
How do you see the year 2013 for Birla Sun Life AMC and the industry?
The economy and the investment environment both look good in 2013. Interest rate drop and improved liquidity will leave more money in the system. We also see equity inflows coming back this year. We also see some money moving from gold to equity. There are expectations of equity outperforming other asset classes in the next three years. The valuations of other asset classes are little stretched right now. Equities will pick up this year.
