We Are Hopeful That Flows Will Pick Up But It May Be Gradual: Union Asset Management Company CEO

With the investors keeping a close watch on the mutual funds sector, G Pradeepkumar, Chief Executive Officer of Union Asset Management Company told Aparajita Gupta in an interview that Future flows would depend on how investors perceive the growth prospects. We are hopeful that the flows will pick up but it may be gradual.

1. Inflows into Indian equity mutual funds jumped the most in three months in June. Do you think that trend will continue for another three months? If yes, why?

While it is true that the net flows in equity in June 19 were the highest among the last three months, this figure is 24 per cent lower than the corresponding figure for the last year. Again, cumulative net inflows into equity funds for the first quarter of this financial year is almost half of what was received in the corresponding period last year. Future flows would depend on how investors perceive the growth prospects. We are hopeful that the flows will pick up but it may be gradual.

2. SEBI has recently tightened regulations for MF to safeguard interest of the subscribers. How will that regulation impact the industry?

SEBI has done a remarkable job in putting in place regulations that are transparent, fair and can protect the interest of investors. A well regulated fund industry is always good for the investors. We believe that the recent regulatory changes would bring healthy progress to the industry in the long term. In the short term, both the AMCs and distributors may face difficulties in adjusting to the new regime.

3. Union MF has launched a new focused fund. Why focused category for new fund launch?

As of now we offer 12 open-ended products and two close ended ones. We have always launched products keeping the interest of investors paramount, rather than being driven by the desire to gather assets. All our existing funds are well diversified and there has been demand for launching a fund that is driven by conviction with a concentrated approach. This is what led us to launch Union Focused Fund. New Fund offer of this scheme begun on July 15, 2019 and closes on July 29, 2019. The fund will have a concentrated portfolio of not more than 30 stocks across market capitalisation categories.

4.  What is the total AUM for Union MF?

Average quarterly assets under management for April to June 2019 stood at Rs 4,307 crore.

5. What is the AUM target by 2020?

Our aim is to grow our assets by 50 per cent in the current year.

6. How many products do you plan to launch this fiscal?

We would launch a product only if there is demand from the market and if we believe there is good investment opportunity. Having said that we may launch one or two products this year.