SBI Mutual in top gear

After jumping to the third spot in the domestic mutual fund industry in a short span of time, SBI Mutual Fund is set to improve its position further in the highly competitive sector. Besides benefiting from being an arm of the country’s largest bank, the fund house is offering solutions keeping the overall investment goals of its clients.

SBI MF, which was the fifth-largest fund house in terms of assets under management (AUM) in the April-June 2018 quarter, rose one notch in the following quarter when it overtook Reliance Mutual Fund to become the fourth-largest player. Subsequently, in the October-December 2018 period, it moved above Aditya Birla Sunlife Mutual Fund to become the third-largest fund house with an AUM of Rs 2.64 lakh crore.

The fund house is set to cross the Rs 3-lakh-crore milestone during the next fiscal.

Ashwani Bhatia, managing director and chief executive officer of the fund, attributed its success to several factors in a highly competitive industry. Apart from the SBI’s distribution muscle that provides it with a ready clientele, Bhatia said the fund house had maintained a strong relationship with independent financial advisers .

SBI MF is also focussed on the digital route to enhance the investing and service experiences for both distributors and customers.

“As a fund house, we are stable, we are sound, we are credible and we will ensure that the money of the investor is protected and taken care of... Our investment philosophy is also very simple, its safety, liquidity and return,” Bhatia said.

The plan is to target the bank network to reach small retail investors with its debt and hybrid offerings, highlighting their benefits over traditional investment options.

It has also been looking to encourage first-time equity investors to start investing through systematic investment plans (SIPs).

One of the key message is to look at mutual funds for their goals rather than the individual schemes.

According to Bhatia, this strategy has paid off with stable flows of over Rs 1,000 crore coming in from SIPs despite a volatile market.

“Over the coming years, as the retail investor gets the taste of SIPs, he or she will come into debt, equity and hybrid products. Gradually, we may see the investor not talking about fixed deposits, but about fixed maturity plans. Its our expectation that the retail investor will realise the benefits of investing in a mutual fund and this industry will only grow further”, Bhatia said.

On what investors should do amid volatile times, the SBI Mutual Fund CEO says ithey should remain invested in mutual funds or equity over the long term. “Over the long horizon, the investor will get returns that beat bank deposits and inflation. People should be good long-term investors, they must invest slowly, steadily and have a goal in mind,” he added.