SBI MF has been receiving the highest inflows compared to other fund houses for the last two quarters. What has contributed to this growth? How much of assets do you plan to garner this financial year?
Our schemes have been performing quite well. The schemes have been outperforming their respective benchmarks because of which more investors are putting their faith in us. In addition, we have been constantly reaching out to investors and distributors, encouraging them to work with us. Our brand name has also helped us receive inflows.
We do not have any specific target of how much assets we want to raise this fiscal year. Our objective is to deliver performance. We have been outperforming the industry for the last two years and expect to outperform this year as well. In the FY 2016-17, the entire mutual fund industry grew at 42% whereas SBI Mutual Fund grew at 46%.
Other than SBI ETF Nifty 50 Fund, which has been getting inflows from EPFO, other schemes are also getting consistent inflows. Schemes whose assets have increased manifold in the last year include SBI Bluechip Fund and SBI Magnum Taxgain Scheme. In fact, the AUM of SBI Bluechip has increased from nearly Rs5,000 crore in March 2016 to Rs13,000 crore in March 2017.
How much inflow are you expecting from EPFO in the current financial year?
If we put together all the avenues, then I think there can be inflows of around Rs20,000-25,000 crore from EPFO. We think that there will be some new instruments as well this financial year, where a part of inflows will be routed to ETFs.
Currently, SBI Mutual Fund and UTI Mutual Fund manage EPFO’s contribution. Of total incremental inflows, SBI MF manages 75% whereas UTI MF manages the rest.
Are you also looking forward to reaching out to PFRDA for NPS money?
SBI is one of the Fund Managers to PFRDA and under the same umbrella two units – pension fund managers and AMCs – cannot manage NPS money.
What are your plans for FY2017-18 for the growth of the company, especially from the B15 cities?
With the help of our parent company SBI and our other distribution partners, we are reaching out to investors residing in smaller cities. To start with, we are promoting debt oriented hybrid funds having low equity exposure in these locations. We prefer debt option in these locations to create positive first time experience among investors. Since these are debt-oriented funds, they remain invested for three or more years. Once they experience good returns, they are likely to explore other mutual fund schemes too.
We are creating an SIP culture in these locations. We conduct investor awareness programmes in B15 cities through banks and distribution channels to spread awareness about investing in mutual funds through SIP. Currently, we have a market share of 11% in the SIP AUM. We aim to increase it to 15% by the end of this financial year through such awareness activities.
How has the response been to the SBI MF Partnership calendar you launched with distributors this year?
The response has been very good. We had more than 500 partners contribute for this industry first, crowd sourcing initiative.
What are the other engagement programmes that you plan to carry out this year?
Last month, we launched a loyalty programme for our channel partners. The idea is to increase engagement with distributors, who have been working with our fund house for years. Under this programme, we provide specific and high quality training from reputed management institutions to distributors to help them grow business.
How often does SBI MF organise investor awareness campaigns? What is the reach of such campaigns?
In a year, we normally conduct 600-700 investor awareness programmes across the country. We have a large force of NISM trainers who conduct these programmes.
Are there any new schemes, which SBI MF is planning to launch in the coming days?
We plan to launch the SBI SDL Fund and the SBI PSU Banking and PSU Debt Fund this year.
We also believe ETFs would grow swiftly in India and we would like to extend our offerings in that space.
Globally, investors invest huge money in ETFs as actively managed funds over there, barely generate alpha. Beyond a point in any developed market, creating alpha becomes extremely difficult and hence beating benchmark at all points is difficult so ETFs become a natural choice. Specially at a time when institutional money also tries to participate in equity funds.
The ETF market is growing in India, and if we see the same growth that has taken place in the last few years, then the market could be worth around Rs 5 lakh crore in the next five years. We never know how market dynamics will work; hence we have to be ready.
