Unifi Asset Management Pvt Ltd, a subsidiary of Unifi Capital and the latest entrant into the mutual fund industry, has announced a strategic departure from industry norms by launching only three mutual fund schemes over the next five years.
“Our focus is on doing a few things exceptionally well. In all that, we’ll probably be the fund house with the least number of funds in the whole country,” said K Sarath Reddy, Chairman of Unifi Asset Management, at a company event. The first offering, Unifi Dynamic Asset Allocation Fund, a hybrid scheme acting as a proxy for fixed income investments, opened for subscription from March 3-7, and will reopen on March 21. The fund saw strong investor interest, with 2,200 participants coming onboard within five days.
Following this, Unifi plans to launch an equity-focused flexi-cap fund in May, covering large-, mid-, and small-cap stocks, and a hybrid fund by June or July, which will dynamically allocate between equity and debt.
Reddy explained that Unifi’s primary focus will be the mass affluent segment — individuals who are financially well-off, pay significant taxes, but are not yet at the level of investing ₹2 lakh in a single PMS. This segment, comprising professionals and self-employed individuals, is rapidly growing.
Investor retention
Amid market volatility, investor retention remains a major challenge for the mutual fund industry, with data from SEBI showing that 73 per cent of investors redeem their funds within two years, and only 3 per cent stay invested beyond five.
Reddy explained that Unifi will shift from a product-based approach to a service-driven model, focusing on communication and investor education to reduce impulsive exits. “If we can shift that average stay from 2.2 years to five or even 10 years, it would be a game-changer. We don’t expect everyone to hold for a decade, but increasing retention from 3 per cent to even 25 per cent would be significant,” he added.
M Damodaran, former SEBI chairman, and Kishore Mahbubani, former President of the United Nations Security Council, and founding dean of the Lee Kuan Yew School of Public Policy, spoke at the Unifi Mutual Fund launch event on Saturday.