MFs chalk out new strategies to rope in more investors

The fate of mutual fund industry, after it witnessed a paradigm shift in the distribution model, lies in the hands of the investor. Industry experts believe that the value proposition in products, offerings and advisory will determine as to who will survive the battle. CNBC-TV18's Priyal Guliani reports.

Apart from grappling with falling markets due to global crisis, the Indian mutual fund industry is going through a transition due to regulatory changes. After initial resistance with regard to changes in the charge structure and distribution model, it is now busy creating value for investors to rope them in.

Ajay Srinivasan, Chief Executive Officer, Aditya Birla Financial, says, "Change in regulation has meant that distribution needs to change in itself. What it means is that commission cannot be there in the product. It clearly means that you need to show value. Some distributors have made the shift, while some are finding it difficult. But over a period of time this is how it is going to be."

Fund houses bringing in new offerings in the market also believe, products offering unique proposition combined with awareness will change the tide.

Ashu Suyash, Country Head and Managing Director, Fidelity India, says, "All the upheaval concerning entry load notwithstanding, I believe there is sufficient interest. It is about continuously building their awareness levels."

But experts say with retail participation being lacklustre in the last couple of months and change in business models, the mutual fund industry will witness the survival of the fittest.