The Wealth Company’s mutual fund business is now about 6 months old and its quest to move from serving HNIs and family offices through its established AIF business to a goal of serving investors in every pincode of the country is now well underway.
Aligning with this ambitious vision from day one, the fund house has been reaching out deep into B-30 cities and towns, spearheaded by its chairperson and the first woman promoter of a fund house in India, Ms. Madhu Lunawat.
She has very ambitious plans for the fund house and iscommitted to making it one of the leaders in the industry over time.
The group has always been B2B focused – whether in its broking or in its AIF business, and remains the same way in its MF foray, focusing entirely on building distribution relationships to grow its business.
She is very glad to see the warmth in distributor relationships that the fund house is building and has led some clutter-breaking distributor training and engagement initiatives by partnering with global experts to bring relevant and topical training and development aids for distributors.
One aspect she requests some large distributors to think about is their policy of waiting for a fund house to complete 3 years of business before deciding on putting their funds on their shelves. She argues that a better way is to evaluate the experience of the team and the differentiation in thinking and strategy rather than applying a uniform blanket rule of 3 year waiting period.
The fund house has now launched its small cap fund – at a time when time and breadth indicators suggest that this segment is probably close to establishing an enduring bottom. An 18 month long correction has taken out froth and the coming rebound in earnings growth numbers suggest that most of the pain is now behind us.
Small caps require more intensive stock research skills to avoid costly mistakes in backing the wrong kind of promoters. That’s where the fund house’s incisive private equity style bottom up research will help the fund in navigating this segment to unlock its true wealth creation potential for its investors.
Madhu says investors must have a 5 year time horizon wheninvesting in a small cap fund. If you do have that kind of time horizon and are willing to ride through volatility in market cycles, small cap is the segment that has the potential to create the maximum wealth for investors over time.