Sunday, June 6, 2010

Q&A: Akshay Gupta, CEO, Peerless Mutual fund

'MF industry needs an entry barrier'

As retail penetration in the mutual fund industry in India is poorer compared to the global levels, domestic fund houses are taking measures to tap the segment. Akshay Gupta, chief executive of Peerless Mutual Fund, a new player in the domestic market, wants to build a profitable mass retail business. In an interview with Chandan Kishore Kant, he talks about the fund house’s objective of reaching a customer base of 5,00,000 in the next three years. Excerpts:

How has the journey of your fund house been since its launch in February this year?
We launched our liquid and liquid-plus plans and have assets under management (AUM) of Rs 1,000 crore. We want to build a stable, profitable and sustainable retail business and do not chase AUM.

What steps are you taking to achieve this?
We want to have at least 5,00,000 customers within three years. For that, we have started regional language call centres — Bangla and Malayalam to begin with — to make retail investors feel at home. We are also providing translated statements in these languages. Further, we will get into Hindi, Telugu, Tamil, Oriya and Gujarati. Similarly, we are developing training modules for our agents in four languages. This will help us focus on mass retail.


What feedback are you getting from IFAs (independent financial advisors)?
They have reduced the business. A small retail IFA is perplexed. I agree that charging for services is difficult, but it has to be started. Financial advisors cannot be taken for granted. Customers will have to respect them. And this will happen by not selling the wrong products.

How many products can we expect from Peerless this year?
The first retail product will be an MIP (monthly income plan) as an income-plus fund in June. We will launch at least three retail products in the next nine months after getting Sebi’s approval, across asset classes.These will be a mix of debt and equity. The products will be more towards gold and debt. We are trying whether we can have debt plus gold, part gold part debt, part gold part equity kind of products.

What’s the update on your search for a foreign partner?
Our talks with a potential partner have ended. We are not scouting for a foreign partner. If an opportunity comes up, we are ready to talk. As of now, there is nobody. Moreover, for the domestic business, we do not need a partner. But after we complete a year or so of operations, we would like to access foreign markets. We would definitely like to get into the feeder fund structure where we feed our funds. Let’s say we come out with a BRIC (Brazil, Russia, India, China) fund where the foreign partner manages the BRC part and we manage the I (India) part.

Do you agree with the recommendation that AMCs should have a higher net worth?
The net worth of AMCs should be higher than what it is at present. An entry barrier needs to be there. People without basic backing are entering the industry. This is unhealthy. A mutual fund is a pass-through vehicle for retail investors, and with such a definition one is not supposed to run PMS (portfolio management services). Other criteria, including the net worth one, should be made in such a way that they discourage frivolous player from getting into the business.

How long will the uncertain situation in the equity market continue?
We are in a phase of extreme volatility. A downward bias is expected. There will be corrections, but their size is unpredictable. The global economy is not yet out of the woods. The patient has come from the ICU to the general ward but has still not come back home. While the Indian economy and corporate results will be average to above average, having said that, we are not decoupled from the global market in the capital market space.

Source: http://www.business-standard.com/india/news/qa-akshay-gupta-ceo-peerless-mutual-fund/396977/

Just click away from joining most active Mutual Fund India google group

Google Groups
Subscribe to Mutual Fund india
Email:
Visit this group

Aggrasive Portfolio

  • Principal Emerging Bluechip fund (Stock picker Fund) 11%
  • Reliance Growth Fund (Stock Picker Fund) 11%
  • IDFC Premier Equity Fund (Stock picker Fund) (STP) 11%
  • HDFC Equity Fund (Mid cap Fund) 11%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 10%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund) 8%
  • Fidelity Special Situation Fund (Stock picker Fund) 8%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Moderate Portfolio

  • HDFC TOP 200 Fund (Large Cap Fund) 11%
  • Principal Large Cap Fund (Largecap Equity Fund) 10%
  • Reliance Vision Fund (Large Cap Fund) 10%
  • IDFC Imperial Equity Fund (Large Cap Fund) 10%
  • Reliance Regular Saving Fund (Stock Picker Fund) 10%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 9%
  • HDFC Prudence Fund (Balance Fund) 9%
  • ICICI Prudential Dynamic Plan (Dynamic Fund) 9%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Conservative Portfolio

  • ICICI Prudential Index Fund (Index Fund) 16%
  • HDFC Prudence Fund (Balance Fund) 16%
  • Reliance Regular Savings Fund - Balanced Option (Balance Fund) 16%
  • Principal Monthly Income Plan (MIP Fund) 16%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Principal Large Cap Fund (Largecap Equity Fund) 8%
  • JM Arbitrage Advantage Fund (Arbitrage Fund) 16%
  • IDFC Savings Advantage Fund (Liquid Fund) 14%

Best SIP Fund For 10 Years

  • IDFC Premier Equity Fund (Stock Picker Fund)
  • Principal Emerging Bluechip Fund (Stock Picker Fund)
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund)
  • JM Emerging Leader Fund (Multicap Fund)
  • Reliance Regular Saving Scheme (Equity Stock Picker)
  • Biral Mid cap Fund (Mid cap Fund)
  • Fidility Special Situation Fund (Stock Picker)
  • DSP Gold Fund (Equity oriented Gold Sector Fund)