Gold Silver Reports – From Buying Mutual Funds to Buying Dreams – Do you fancy buying a small bar that contains oil, water and lye (sodium hydroxide and potassium hydroxide), and synthetic fragrance? Don’t scratch your head, we’re talking about soap. Now, would you buy a lavender soap that promises to refresh and revitalize you? You may be tempted.
Put it another way: would you prefer a product that invests in top 100 companies by market capitalisation, that are researched using complex ratios such as price-earnings multiple, return on net worth, and price-to-book value? Or would you buy a scheme that gives you enough money to send your daughter to a postgraduate college when she turns 21, without having to take a loan? In both the cases, we’re talking about a mutual fund scheme. The difference is: the former is a product, the latter is a solution. That’s the issue that the Rs22.41 trillion Indian mutual funds industry is trying to address: should it sell you products or dreams?
Fund Houses Reports…..
Last week, SBI Funds Management Co. Ltd, with assets of Rs2.05 trillion, repackaged its traditional systematic withdrawal plan (SWP) product into a solution that enables you to send money to your immediate family members. With this, you could offer financial help to your parents, kids or your spouse by depositing money in their bank accounts.
It even renamed this facility Bandhan, referring to family bonds. “Instead of an investor getting the benefit at the end, the money gets deposited directly in the bank account of the beneficiary family member,” said Anuradha Rao, managing director and chief executive officer, SBI Funds Management Co. Ltd. Rao reiterates that Bandhan SWP is not a new product, “It is a solution. We are not launching any new scheme around it but just enhancing the scope of an existing facility.” – Goldman Neal Bhai Reports
