Fidelity plans investor education thrust

To use call centre in Gurgaon to provide support to banks and intermediaries

Fidelity Investments, the world's largest mutual fund, is planning a blitzkrieg in India for investor education, which would include seminars and internal training programmes.

It is also planning to utilise its call centre in Gurgaon near Delhi as a 'wholesaler' providing support to banks in India as well as market intermediaries.

Richard Wastcoat, managing director, Fidelity Investments International, said, "We are excited about the Indian markets and the trends in demography, savings rate, the equity cult and the liberalisation happening."

Fidelity is set to launch its mutual fund schemes in India. Also in consonance with its equity focus elsewhere, its initial offerings will all be equity-oriented schemes. Wastcoat said they were confident of a decent response from the market.

He, however, said that the size and assets were not so important as performance and making available the right sort of products for the Indian investing public.

He said there would be a lot of emphasis on investor education, with a commitment to acquisition of new skills.

The call centre operation in Gurgaon at present operates as a captive base for Fidelity's back-end operations worldwide.

According to Wastcoat, the plan is to expand it further and make it a wholesale hub encompassing the entire financial sector on a global scale.

Incidentally, the company is bringing to bear its influence on the regulators - the Securities and Exchange Board of India and Reserve Bank of India - so that it can bring its global products and sell them in India.

Wastcoat said, "We are working with the Association of Mutual Funds of India to get India recognised so that we can get the Luxembourg funds to India."

It may be recalled that the Centre had raised the investment limit for resident Indians abroad to $25,000. Wastcoat said after the announcement by Calpers - the California-based pension fund - that it was planning to invest in India, there has been a definitive interest from other such pension and retirement funds for investing in the Indian markets.

"There is higher confidence level," he said. Fidelity's unique selling proposition, according to Wastcoat, would be in brining in new products, international best practices into India and set the way for investors to look at mutual funds as long-term growth-oriented products.

While existing players like Franklin Templeton have already led the way in investor education, Fidelity's job would be to take it forward and to increase the share of the asset management business in the total investment pie.

At present the total investments in the equity assets of mutual funds is to the tune of $6 billion, which is roughly around three per cent of the total market cap of the Indian stock markets.

When asked what would happen if they found themselves with a modest asset size after spending five years in India, Wastcoat gave the example of the UK where the company took 20 years to become the largest fund company "two years back".