Bengaluru: Online mutual funds seller FundsIndia expects to double its assets under management (AUM) to Rs10,000 crore by the end of March 2019 by boosting spending on marketing at a time when retail investor interest in stocks is high.
The online mutual funds distributor will also start selling insurance products to diversify its revenue base and increase customer loyalty, chief operating officer Srikanth Meenakshi said in an interview.
FundsIndia (Wealth India Financial Services Pvt. Ltd) also expects the online mutual funds industry to double its share of mutual funds sales from 25-30% currently, Meenakshi said.
“In 2015-17, everybody launched an online platform including brokerages, offline players, banks, asset management companies and others. We expect that somewhere in the next five years, the online share will get to around 50-60%," he added.
Founded by Meenakshi and C.R. Chandrasekar in 2009, FundsIndia started out as an seller of mutual funds online and later diversified into other investment products including stocks, corporate fixed deposits and bonds. Mutual funds still contribute 75% to 80% of its revenue, chief executive Chandrasekar said.
After taking six years to reach Rs1,000 crore in AUM, FundsIndia has expanded rapidly since June 2015 partly because of efforts by Association of Mutual Funds in India (Amfi) to increase public awareness about mutual funds.
The AUM of the overall mutual funds market, which includes products from banks, joint ventures, asset management firms and others, stood at Rs13.40 trillion in December 2015, according to Amfi. This figure shot up to Rs171 trillion by January 2018, Amfi data showed.
Apart from Amfi’s advertising and marketing campaigns to promote mutual funds, factors like the slowdown in real estate, falling gold prices and low interest rates on deposits have helped increase the popularity of mutual funds market in recent years and persuade risk-averse Indians to invest in the stock market.
FundsIndia has been one of the biggest beneficiaries of the expansion of mutual funds. The company currently has over 160,000 customers and Rs5,000 crore in AUM. According to documents with the Registrar of Companies, FundsIndia is the largest mutual funds seller online, ahead of rivals such as Scripbox and Wishfin.
Over the past two years, several online wealth advisory start-ups such as Fisdom, WealthTrust, Tauro Wealth and others have attracted interest from investors.
To differentiate itself from rivals, FundsIndia relies heavily on its in-house research and advisory team. The company sends weekly articles to customers around topics like hot funds or stocks to invest in and how to plan investments. It also schedules advisory calls with customers to explain current market conditions and answer customer queries about stock-market investing.
FundsIndia will also sell insurance products by June to help the company retain customers.
“Insurance offerings on our platform will be aimed at our existing customers who already have mutual funds investments. Once you acquire a customer, you need to make sure he stays invested for a good time. Just like in banking, once you open a bank account, customers don’t move or change their money for a long time," Chandrasekar said.