Edelweiss Mutual Fund - Mutual Funds and Investment Solutions

Letter from CEO

“Kuch kiye bina hi jai jai kar nahi hoti, koshish karne walon ki kabhi haar nahi hoti.”
- Harivansh Rai

Dear Friends,

We, at Edelweiss AMC, caution our investors about the inevitability of volatility in the markets that ups and downs are indeed a feature and not a bug in equity investing.

And so, after a few years of post-COVID calm, almost one-way growth, and heady optimism, the past year is a part of the journey. These years are also essential because they reinforce our belief, both in investing and building a business on steady foundations and focusing on sustainable growth. For Edelweiss AMC, this year is a story of resilience and sustained growth, ahead of industry benchmarks, in the face of turbulence and global headwinds.

The Mutual Fund Industry – Standing Tall in the Storm

Mutual funds today are the preferred investment vehicle for the common Indian investor, a highly regulated, transparent, and cost-efficient financial product that offers a range of products and solutions to meet different needs. The sustained growth of the industry, amidst market volatility and global challenges, is a testament to the quality of this platform. Assets managed by the Mutual Funds Industry reached Rs.39 trillion in March 2023. Most heartening is the fact that the industry SIP book reached a record high of Rs.14,276 crore during the year, reflecting both the confidence of retail investors in SIP as an investment vehicle and their increased maturity in continuing to stay invested in market turbulence. Individual SIP accounts hit 6.36 crore in March 2023, a staggering growth of 21%.

With a mutual fund to GDP penetration of 16%, we do believe the industry is set for structural growth, benefitting from many tailwinds including financialisation, digitisation, and the impact of industry-wide initiatives like Mutual Funds Sahi Hai.

‘For Edelweiss AMC, this year is a story of resilience and sustained growth, ahead of industry benchmarks, in the face of turbulence and global headwinds.’

Edelweiss AMC – Ahead of the Pack

I am delighted to share that this year, Edelweiss AMC crossed the milestone of Rs.1 lakh crore AUM, representing a growth of 27% in FY23, which is well ahead of the industry’s 5% growth. This makes us the fastest-growing AMC among the top 15 players in the industry, ranked 12th at the end of FY23. It is heartening that we added Rs. 22,000 crore of net flows in a year that was tricky for the industry, particularly on the fixed income front. Equity assets have been a key focus for us, and we finished at Rs.22,700 crore in equity AuM, with a growth rate of 16% in comparison to industry equity growth of 10%. As we continue the journey of taking the brand EMF to a wider and wider audience, our retail folios closed at 11.7 lakh, reflecting a remarkable 20% YoY increase, in a period where industry folios grew at 13%.

Investments – Investing in the Core

Over the past few years, we have continued to strengthen the core engine of our business and our investment team. We now represent a team of over 22 investment professionals with a collective experience of more than 150 years. This year, we continued to add to this capacity, particularly strengthening our long-only investment team with senior analysts and a dedicated analyst focusing on ESG and forensic analysis, as well as our private market alternatives team. We have always believed in investing in process and then people, and we have also continued to strengthen both our internal investment processes and how they are communicated to customers and distribution partners.

Innovation – Continuing to be Committed

Brand Edelweiss AMC has always been known for the innovation we bring to the industry.We do not think of funds in terms of new categories we can launch, but are looking for finding new and first-to-market ways to solve customer problems.Keeping this philosophy is mind, this year, we continued to build our efforts with a number of new products.

We have been market leaders in debt passives, with nearly 50% market share, starting with the much-loved Bharat Bond franchise in partnership with the Government of India. This year, we launched Bharat Bond 2033, now taking the program to six products.

‘The correction in private equity markets amidst global turmoil and rising rates has led to attractive opportunities in the growth equity space.’

We also expanded our basket of target maturity index funds, the fastest-growing category in the debt space in the last three years and continue to have the widest basket of debt passive products available for an investor. While target maturity funds have been adopted by other industry players, this year we introduced an industry-first fixed income solution, the first open-ended short-term debt index fund. This product aims to provide investors a simple parking solution – a cost-efficient avenue to invest debt money at low costs and with strict portfolio boundaries.

We have always wanted to expand our equity franchise in a calibrated way, making sure every active fund is true to label, and well managed.

This year, we added the Focused Equity Fund, but with a differentiated strategy, focusing on three key dedicated investment themes. We also expanded our equity passives basket with three new products, including one of the industry’s first midcap momentum funds. In an attempt to provide solutions across the asset allocation for investors, we also introduced the country’s first gold and silver blended product, a balanced blend of both categories with the aim to provide a good hedge against inflation in the long run.

Our alternatives basket is an important part of our business, and alternatives are only becoming more mainstream. The correction in private equity markets amidst global turmoil and rising rates led to attractive opportunities in the growth equity space, and our focus has been to scale up Edelweiss Discovery Fund.

We have completed our first set of investments in the fund and continue to build this space.

Customer – Always at the Centre

Edelweiss AMC today is proud to be a brand that serves 11.7 Lakh folios, and not just serving but prioritising customer needs and delighting customers has always been our mission. In times of volatility and underperformance, where applicable, it has been fundamental to our philosophy to communicate, communicate, and communicate. Our proactive approach towards communication and outreach has been positively received by our customers, evident from their active engagement on social media and favourable responses in brand surveys.

We also keep introducing enhancements to improve the quality of our digital and service experience for stakeholders, including new features on our website and app to enhance service delivery.

Distribution – Limitless yet Efficient

At Edelweiss AMC, we have always believed that intermediation and advice are important in the investor’s journey, highlighted in our campaign #AdviceZarooriHai. Distributors are our brand ambassadors and foot soldiers, building the bridge between investors and ourselves. Today, we can continue to expand our reach with a limited sales network, only because of the investment in our distribution network. This year, we continued to expand our distribution base, particularly in the banking and wealth segment, with an active distribution base of 8,800 partners. We also strengthened our relationship with partners through consistent engagement facilitated by our training platform, Konnect Klassroom, a dedicated space for upskilling and education. The quality of our digital platforms continues to improve, with Galaxy, our core distributor transaction platform, undergoing a revamp and the addition of SWIFT, a new digital platform for the alternatives business.

Employee Engagement – Making It Possible

Employees make everything on these pages possible, as we say, they are the biggest assets we have and the ones we take foremost efforts in managing. Providing our people an environment to grow, an office where they enjoy coming to work, and a culture in which they can be their best is our responsibility. This year, we continued to focus on active employee engagement and skill-building, not just for senior talent but for promising young talent and upcoming managers.

Recognitions, including being named the “Most Preferred Place to Work in BFSI” by Marksmen Daily, and consistently high employee engagement and NPS scores validate our efforts in this direction.

Vision for Tomorrow

The last few years have been a melange of challenging, exciting, and extremely rewarding for our team, as we build out our investment processes, products, track record, team, and distribution network. This also has been a period of continued support from our customers and distribution partners, and for that, we remain truly grateful.

I look forward to the coming years with the continued excitement of taking the brand Edelweiss AMC to more investors across the country, expanding our range of offerings, further strengthening our processes, and evolving as a responsible and responsive AMC that sets standards in the industry for innovation and thought leadership.

Yours sincerely,
CEO, Edelweiss AMC