Mutual funds to hold 2,500 investor camps

Mutual funds will soon take the investor education route to reach out to the masses.

Concerned over the low penetration of mutual funds in the country, the Association of Mutual Fund in India (Amfi) has sent a mailer to all fund houses last week suggesting that each of the 42 fund houses conduct five investor education programmes a month.

That’s 60 camps per fund house a year, and 2,520 if you take them all — or at least 7-8 a day. The number can grow as more asset managers are lining up to offer mutual funds in India.
The industry had assets worth Rs 8.08 lakh crore under management as on April 30, 2010.

The Amfi suggestion is as per the recommendation of its investor awareness committee chaired by Sundeep Sikka, chief executive officer of Reliance Mutual Fund. Sanjay Kaley of Fidelity Mutual Fund, Kailash Kulkarni of Kotak MF and R Srinivasan Jain, chief marketing officer at SBI MF are also on the committee.

“Amfi has suggested that five investor meetings be conducted each month. It could be in all class of cities, preferably in Sec B and C cities as the penetration there is low,” said an industry source, not willing to be named.

He said to make sure there is no conflict of interest, Amfi’s common presentations will be used during these investor meetings.

Sundeep Sikka said, “We had made the recommendation to Amfi 30 days ago. Considering the low penetration of investments into capital markets, it is essential to educate people. We are looking at how to channel investments from people who are not familiar with the equity culture into equity markets through mutual funds.”

The details of the seminars by various fund houses in different places will be displayed on the Amfi website, said another source.

Though it is not clear how the asset management companies which are already stressed in terms of profitability will source finance for the five camps a month, Sikka said, “These are low-budget meetings. These will be conducted in small halls, schools. Industry sees it as an investment. There is a good response from potential investors.”

Most industry players claim it will not be an additional expense as they had already been conducting awareness programmes even before the Amfi mail was sent.

“We have been doing over 100 shows across the country. The cost will be a factor for the AMCs which have not been doing it in the past, but not for the ones that have been conducting programmes even earlier,” said a chief of an asset management company not willing to be named.

Others who have been doing programmes said the common format will help. “It will now have an official touch. More or less the format is going to be standardised. This will help keep it neutral and educate the investor,” said Bhanu Katoch, chief executive director at JM Financial MF.