Present Challenges & alternate channels of distribution

Transcription

1 Present Challenges & alternate channels of distribution S. Muhnot MD & CEO IDBI Capital Market Services Ltd

2 Presentation Contents Market Perspectives of the Indian Mutual Fund Industry Online the new channel of distribution for retail A brief look at the online trends in India Profile of the online user in India A close match with the MF retail investor profile? Merits of investing online for the retail investor Investing online in Mutual Funds the idbipaisabuilder.in way

3 MF AUM on upward spiral 55% increase in last 1 year Source : AMFI India website

4 MF Industry On an upward path Significant increase in MF AUM in India Several new MF AMCs have entered the space in last 2 years Increasing participation of retail investors in MF as an investor class:- Consumer education / awareness and promotions by the AMC s have fuelled this Budget benefits (80 C) driving ELSS category more strongly now, attracting new NFOs to this category Record collections seen in many new equity oriented NFO s recently

5 Substantial potential for growth still exists..

6 Bank Deposits AUM ratio Bank Deposits in India are 9 times that of the MF AUMs in India presently:- Bank Deposits as of 31 March ,087,670 crores (RBI) MF AUM as of 31 st March ,862 crores (AMFI) This ratio is much lower in the developed countries

7 Household investments in Shares, Debentures & MFs. % of household financial assets in shares, debentures & MFs has gone down from 9.26% in to less than 2% now. Year Currency Bank deposits Nonbanking deposits Life insurance fund Provident and pension fund Claims on Government Shares & debentures Units of UTI Trade debt (Net) $ 9.16% 39.05% 0.42% 13.15% 13.15% 24.02% 1.82% -0.73% -0.05% % 38.37% 7.94% 7.81% 14.72% 9.06% 9.26% 2.69% -0.79% Source : RBI website

8 Equity Mutual Funds rising Equity oriented schemes preferred increasingly by investors. Share of equity schemes now 43% of AUM Year-End Debt MFs Equity MFs Balanced MFs Mar-02 68% 16% 17% Mar-03 82% 14% 4% Mar-04 79% 18% 3% Mar-05 71% 26% 3% Mar-06 54% 43% 3% Retail is the target now

9 Demographics in favor Source: NCAER

10 Demographics in favor 2001 % 1991 % Change # Age Major part of the population in the working Age group

11 Distribution Channels Traditional Agents AMFI certified only Banks (PSU / Private) Reach MF Offices Distributors Logistics issues Major focus on wholesale

12 New Distribution Channels Online Net Penetration & Online medium usage catching on very fast in India Let s see some data..

13 Internet & Broadband Penetration Projections Year Internet Broadband Million 3 Million Million 9 Million Million 20 Million Data Source : G.O.I Broadband Policy Significant drive by Public & Pvt. Telecom players like BSNL, MTNL, Tata Tele, Reliance & Airtel to promote broadband

14 Internet User Profile 38.5 Million Unique Internet Users in India presently (IAMAI) Up 54% since Million are Males 68% (Internetworldstats.com estimates the number to be 50.6 million in India) 100 Million India s projected internet population in the next 2 yrs, by % of Net users - monthly family income > Rs. 10,000 3 Out of 4 users have an automobile & every second one has a credit card 45% of internet users have bought a product or service online Data source: Internet & Mobile Association of India

15 Online Business in India Rs Cr. online transaction value in in India, up by more than 100% Rs Cr. expected transaction value Data source: Internet & Mobile Association of India Online Shopper Profile How relevant for MF s online? The right Age Group The right education profile The right Occupation Online medium now being Upto actively SSC/HSC used for airlines, 2% hotels, Officer train / Executive bookings, -Middle movies to Senior Level 41% Shopping through portals Under like Graduate rediff, indiatimes on 11% upswingself Employed Online auctions (ebay.in) Graduate gaining / Post strong Graduate foothold Professionals 13% (General) 37% Online medium also very actively used for matrimonials now Businessman (Shaadi.com /Industrialist 11% Graduate / Post Graduate & Bharatmatrimony.com) (Professional) 46% Others 3% Officer / Executive - Junior Level 13% Skilled / Unskilled Worker 4% Supervisory Level 3% Clerical / Sales person 1% Others 12%

16 Online Shopper Profile Online Shopper Profile How relevant for selling MF s online? The right Age Group The right education profile Upto SSC/HSC 2% Under Graduate 11% Graduate / Post Graduate (General) 37% Graduate / Post Graduate (Professional) 46% Others 3% The right Occupation Officer / Executive -Middle to Senior Level 41% Self Employed Professionals 13% Businessman /Industrialist 11% Officer / Executive - Junior Level 13% Skilled / Unskilled Worker 4% Supervisory Level 3% Clerical / Sales person 1% Others 12% Data source: Internet & Mobile Association of India

17 Online Trading in India Online turnover on NSE Average daily turnover from online trading :- More than Rs 700 crores now Up from Rs. 200 crores as on March % of NSE turnover Online now, up from 5% one & a half year back. Denotes tremendous potential for selling Mutual Funds through online route also

18 MF investing for Retail Investor The current perspective Key Issues Faced More than 30 MF houses & 600 schemes in operation Difficulty in deciding which schemes to invest in no proper data on scheme objectives, past returns, scheme performance, volatility of different schemes Often ends up choosing wrong schemes on his own or those recommended by his agent (commission driven recommendations) Lengthy procedure for investing request for forms & lengthy form filling process, form submission with cheque, awaiting allotment, manual tracking of NAVs and portfolio values, tedious redemption procedure etc.

19 Why online MF is the ideal way Choice of investing in different MF houses and schemes at 1 place. Comprehensive information at 1 place on all schemes covering category performance and category rankings, scheme objectives, historical performance, NAV history, volatility patterns, scheme portfolio, entry-exit loads etc. Facility to cross-compare any 2 schemes across various parameters No manual processes, no form filling Just a 5 minute process Proof of identity and signature proofs not required for every MF purchase Facility of SIP/SWP with reminder triggers by Orders confirmed online Auto updation of portfolio with latest NAV s everyday Completely safe, secure and confidential All customer queries handled at one place

20 Investing in MF s online What the investor wants is proper analysis, information, advice for deciding which category, which scheme and which Mutual Fund depending upon his risk profile, investment objectives and time horizon in an unbiased manner. All this and more is available for online investing in Mutual Funds at

21 Happy Investing Thank You

22 MF Investing the idbipaisabuilder way Snapshots of some features. Learn the basics and terminology used in Mutual Funds Compare performance of any 2 schemes Evaluate best performers by category of schemes

23 MF Investing the idbipaisabuilder way Snapshots of some features. View comprehensive details of any scheme incl. performance comparison with Sensex Compare performance of MF categories over 1 month, 1 year, 3 years & 5 years View NAV History of any scheme since it s inception