How LIC Mutual Funds Plans to Enter 1L Cr+ AUM Club?
In this blog, we will discover the roadmap of LIC MF for achieving this 1L Cr+ AUM Club.
LIC Mutual Fund is a subsidiary of the Life Insurance Corporation of India (LIC). LIC Mutual Fund has a visionary goal to surpass ₹1 lakh crore in assets under management(AUM) within the next five years. This goal signifies a significant milestone for the company as it seeks to solidify its position as a leading player in the Indian mutual funds industry.
In this blog, we will discover the roadmap of LIC MF for achieving this 1L Cr+ AUM Club.
Steps by LIC Mutual Fund to Achieve 1L Cr+ AUM
LIC Mutual Fund has committed itself to keeping up with the rapid expansion of the Indian mutual fund market. They have stated a five-year growth plan of growing 3.5-4x or at least taking their AUM past the ₹ 1 lakh crore mark by FY27. The company had an AUM of ₹32,000 crore as of February 2024, which is expected to grow Rs 50,000 crore by FY2025 and ₹1 lakh crore by the end of FY2026.
With a target of joining the elite ₹1 lakh crore Assets Under Management (AUM) club, LIC MF has embarked on a strategic journey to transform its presence in the market. Here is how.
Increasing the Reach of the Distribution Network
By extending its presence in tier-2 and tier-3 cities and working with new LIC agents to develop client relationships, LIC Mutual Funds intends to expand its distribution network.
To improve its current distribution channels, LIC AMC is attempting to form new alliances with banks and other financial organizations. To increase the size of their investor base, they are focusing on the new generation of millennials and first-time investors.
Growing Range of Products
The goal of LIC MF is to expand its range of products beyond standard fixed-income plans. To give investors access to a variety of products, it has introduced new funds in the money market, debt-equity hybrid, and equity categories.
In order to attract investors to sustainable investment, it also intends to introduce thematic and ESG (Environmental, Social, and Governance) focused funds. This wide range of offerings would attract investors with diverse goals and preferences.
Leveraging IDBI Mutual Fund Merger
The merger with IDBI Mutual Fund provided LIC MF with a significant boost in AUM, expanding its reach and customer base. The combined expertise and resources of both entities strengthened LIC fund’s market position.
IDBI AMC had 20 funds, of which 10 were retained, while the rest were merged with LIC’s existing schemes. The merger attracted 3 lakh new retail customers to LIC, boosting their low retail base of 5.5 lakh in 2023.
Digital Transformation
To provide a seamless online investment experience to its customers LIC MF is investing in technology to enhance its digital interface.
They are planning to launch user-friendly platforms like mobile apps, SIP Calculator, online investment platforms, educational resources, and robo-advisory services to provide more ease to their customers.
Investor Education Initiatives
LIC MF is actively conducting investor awareness programs and educational campaigns to promote financial literacy regarding mutual funds to encourage more people to invest and achieve financial freedom.
This will not only help in attracting new investors but also in retaining existing investors.
Customer-Centric Approach
LIC MF is prioritizing customer satisfaction by delivering consistent and competitive returns across its funds. It has strengthened its investment team and research capabilities to ensure optimal portfolio management and risk mitigation.
LIC AMC team regularly engages with investors through various touchpoints to understand their needs and provide better solutions to their problems.
Additionally, LIC funds are developing a strong risk management framework to safeguard its investors from fraud and online scams.
To Wrap Up
LIC MF has a strong foundation to build upon, with a well-established brand, an experienced investment management team, and access to the vast LIC network. By effectively executing its strategic plan and leveraging these strengths, LIC AMC is well-positioned to achieve its goal of entering the 1 lakh crore plus AUM club and becoming a dominant force in the Indian mutual funds industry.
