Mutual funds companies are expected to spend more than Rs350 crore on advertising in 2018 to educate investors and debunk myths associated with the product.

Advertisement expenditure by asset management companies stood at Rs230 crore led by print along with an additional Rs50 crore on digital between January and December last year, according to media buyers’ estimates. “I’m expecting at least 30% increase in spends this year. The mutual fund category is targeting risk-averse investors who are looking for alternatives to products like fixed deposits which are no longer yielding high interest," said Navin Khemka, managing partner, Wavemaker India, a GroupM owned media agency.

A fixed deposit in a bank typically offers an annual interest rate of between 6% and 7% while returns on mutual funds can be much higher. Despite fixed deposits becoming less attractive, relatively low risk appetite and lack of information about alternative investment options make it difficult for asset management companies to expand the popularity of mutual funds.

Industry body Association of Mutual Funds in India (AMFI) launched a campaign in March 2017 to educate investors about mutual funds. The ongoing campaign with the slogan ‘Mutual Funds Sahi Hai’ (Mutual Funds are right ) is being promoted across television, print, outdoor and digital. The television ads show people in everyday situations recommending mutual funds to their friends and family.

“In the last nine months after the campaign broke, we have received over 68 lakh folios, SIP volumes have gone up by 40% and over 17 lakh new customer PAN numbers have been added to the category," said A. Balasubramanian, chairman, AMFI. The body, which has an estimated budget of between Rs180 and Rs200 crore for promotions, will launch a new campaign this year highlighting the benefits of long-term mutual fund investments.

While AMFI’s campaign generates curiosity about mutual funds, the task of fulfilling this curiosity (how and why one should invest in mutual funds) is being taken up by mutual fund companies.

“I ran a poll on my Twitter account asking people what is the one thing they are looking for from mutual funds this year and the answer was simplicity of product communication. People just don’t understand how to invest in mutual funds and our advertising isn’t helping them either. It is crucial for us to simplify schemes and explain it to investor through our ads," said Radhika Gupta, chief executive, Edelweiss Asset Management Co.

Edelweiss is going to launch a multi-city outdoor campaign to promote various products.

UTI Mutual Funds is also promoting ease of investing through its digital campaign ‘Digi Invest’ urging investors to use their app and website which gives them control over their investments.

“We are also consciously promoting mutual funds as a source of fixed income and not just about equity through our campaigns. This strategy wards off volatility and myths associated with the category. We offer a liquid fund which allows extra money in one’s bank account to be transferred and Rs50,000 can be instantly redeemed. These features help build confidence in the category telling consumers that their money is not locked up," said Gaurav Suri, senior executive vice president and marketing head, UTI Mutual Fund.

Axis Mutual Fund, for instance, has launched a humorous digital campaign which promotes how investing in Equity Linked Savings Scheme (ELSS), unlike other tax saving options, is not just helpful in saving tax but a great way to way to create wealth. “ELSS has become all the more relevant today given the low-interest rates offered by traditional tax savings options. Our endeavour is to inform consumers about this functional aspect in a simple and entertaining way," said Rohan Padhye, vice president—marketing communication and digital marketing, Axis Mutual Fund.

“This part of the year (between January to March) is when most of these companies pump in a lot of advertising money to communicate the tax saving benefits and mutual fund players are making the most of it," said Himanka Das, chief executive, Vizeum, a Dentsu Aegis Network owned media agency.

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