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An advertisement campaign by the Association of Mutual Funds in India (Amfi) aimed at boosting awareness of products has widened the rift between bigger houses and smaller peers of the country’s asset managers. The ad from the industry body, a part of its investor awareness programme, brings an analogy between an injection and mutual funds.
The television ad says, "Mutual fund ko injection bhi keh sakte hain, inflation ka injection. Zara sa chubhega, lekin saalon tak mehangai ki bimari se ladega (Mutual funds can also be termed injection - injection for inflation. It will prick a bit but would help fight against inflation for years)”.
Officials at mid- and small-sized mutual funds have raised objections over the use of the word ‘injections’, which, according to them, may have a negative connotation. These officials spoke on condition of anonymity.
“It is an insensitive ad,” says the chief executive officer of a mid-sized fund house. “It sounds like some injection for some disease,” he adds. This issue heightens the dispute between the larger and smaller mutual funds, which have alleged in the past that Amfi’s decisions have favoured their bigger counterparts.
Another top official of a mid-sized mutual fund said the ad results in negative publicity for the sector, which has been struggling to attract fresh money since the ban on entry load and due to uncertain market conditions. “Such commercials (which are funded from our pockets) only aggravate the issue,” says one of them. These officials are also critical of the advertisement emphasising on savings. "We are here for making people invest, not save. This way we are selling a wrong concept," said another official.
Amfi countered that all AMCs were aware of the content of the advertisement before it was aired. The link of the commercial ad was sent to all asset management companies (AMCs).
H N Sinor, chief executive at Amfi, told Business Standard, “This is a decision taken at the board level of Amfi where it has representation from its members. The Board’s decision represents consensus among the members. There could be individuals who do not agree but I cannot take 100 per cent consensus of the members. Some people like something and others may have a separate opinion on the same.”
Amfi's committee which looks after investor awareness programme is chaired by Sundeep Sikka, chief executive officer of India's second largest fund house, Reliance Mutual Fund.
According to Sikka, "At Amfi, we are committed to increase awareness of MFs to attract new investors. This is the second TV campaign from Amfi to increase the awareness across the country. Amfi through all AMCs has already conducted 10,083 investor awareness camps in this financial year. The present TV commercial, nation-wide roll out awareness camp and other initiatives being planned out are part of Amfi’s strategy to increase the retail base of the MF industry.”
The campaign is aimed at bringing back retail participation into mutual funds, as this category has largely stayed away or withdrawn their money from schemes in recent years. The equity segment (which has mostly retail clients) witnessed a decline of about four million folios so far in 2012-13.
