According to data from the Association of Mutual Funds in India (AMFI), investments in equity-oriented mutual fund schemes in 2019-20 saw a 27 percent decline. It stood at Rs 81,600 crore, compared to the Rs 1.12 lakh crore inflows in the previous fiscal year. This month, AMFI reported that the total Systematic Investment Planning (SIP) book dropped to Rs 8,123 crore in May, the lowest in the last 11 months.
“With the onset of the global pandemic, investing in capital markets has become problematic. In the larger realm, India observed a crunch in its liquidity, and investors panicked in response to the ups and downs in the market, leading to decreased investment in mutual funds, a sector that has proven to be promising in the last decade,” shares Basavaraj Puttappa, Founder at Zeva Astras, a Bengaluru-based Private Wealth Management tech startup.
The recent closures of six debt mutual funds as a consequence of lower liquidity in the NBFC sector has sent a wave of panic across investors around the globe, explains Basavaraj who comes with over 16 years of experience in portfolio management, wealth management and family offices.
Time for revamp not exit
Today, even though the volatility in the economy, uncertainties in the job market, and low investor confidence have impacted investments negatively, experts suggest otherwise and Basavaraj concurs. “It’s not the time to pull out investments from the market. That said, it is time for investors to revamp their investment strategies.”
Explaining why, he says, “Decisions made in panic may largely be presumptuous. In times like this, it is especially important to strategise.” Investing in safer mutual funds could be the way forward. While he acknowledges that investors must make the effort to understand the risks of investing carefully, he says the risk of investing is lesser than the risk of not investing at all. “Timing the market is a futile exercise. Expanding the current investment paradigm to two or three years from now, everything does change. It’s not new news to anybody that it is a difficult time right now. The rule of thumb is that investors buy more units when the market is down. Exiting takes away the opportunity to accumulate more. There is an opportunity in adversity.”
Assets Beyond: Addressing investors’ dilemmas and challenges
One such investment strategy is learning how to mobilise the returns on Mutual Funds, collateralise the funds and use the margin to trade in conservative derivative strategies.
“With this strategy, the annualised returns range between 6 percent and 8 percent and these are returns over and above your existing mutual fund returns,” explains Aftab Kamalapur, the COO, as he joins Basavaraj, Shashi Kiran PV, CMO and Andal Srivatsan, VP to talk about Zeva Astra’s new offering - Assets Beyond.
A flagship tool offered under the paradigm of financial services that the wealth management platform offers, Assets Beyond makes it easy for investors to do exactly that, says the COO. “One of the key problem statements that served as the foundation for Assets Beyond is -’Could there be a way to trade in derivatives without investing cash?’”
Aftab says Assets Beyond not only provides a solution to the pressing dilemma that investors face, but also induces some form of predictability for their returns.
“With Assets Beyond, investors get a regular income over and above the returns on their Mutual Funds. More importantly, investors can either redeem it from time to time or choose to reinvest.”
The other key advantage is that investing via Assets Beyond lends itself to low risks. “The first priority is to safeguard the investments and the second is to generate returns,” says Aftab, adding, “We ensure that we trade conservatively in derivatives. There is an option for an investor to define his risk appetite; but that apart, we have defined strategies with our technology and technical know-how to ensure the rewards do not outweigh the risks beyond a point.”
Another incentive for investors is that they do not have to make any additional investments as Assets Beyond can work with their existing mutual funds.
Bengaluru-based Gunashekar’s experience of the platform concurs with the promises made. He shares, “I had invested predominantly in the midcap Mutual Funds. However, the funds were not performing well for the last two years and had seen a 25 percent dip.” And, while casually discussing equity investments with a friend, he came to know of Zeva Astras. “He told me how his wealth manager was managing funds to deliver 6-7 percent returns above the Mutual Fund returns.” Because his investments had already seen a big dip, Dr Gunashekar knew he wouldn’t be able to withdraw the funds. At the same time, he didn’t have enough confidence to invest more. That’s when he reached out to Zeva Astras.
“After a thorough analysis of my portfolio, I was informed about Assets Beyond. I decided to go for it. The decision has proved worthwhile . Even when the market is uncertain today, I am able to generate 9-12 percent returns from my investments,” he shares.
With returns that are significant; the flexibility to encash fixed returns over a period of time; and low risks, it is not hard to see why the founders and investors alike believe the platform is revolutionary.
The platform, currently in the pilot phase, has been made available to investors. “All that the investors need to do is visit the Zeva Astras website and send in a query. This helps to give a personal touch to our services as we get to explain the product to them before they invest,” shares Aftab.
A strong proponent of technology in the traditional wealth management space
Zeva Astras is a strong proponent that the modern-day market warrants dynamic, empirically-developed tools and that it is a basic requirement for the wealth management sector.
“Aided by technology and a strong understanding of the wealth management space, our products aim to mitigate risk on investments and create a healthy environment for investors. This has been true for our portfolio advisory services, which we launched in mid-2018 to Assets Beyond - our latest offering,” says Shashi Kiran, who like the core leadership team at Zeva Astras comes with a strong expertise in Portfolio management, Private Equity and Alternative investment strategies.
Leveraging technology has helped the startup create products to differentiate itself from the market. “Firms in the sector traditionally rely on manpower to read markets and take decisions. We, on the other hand, have stepped away from the conventional practices. Our technology decodes market movements without any human intervention. Thus, not only are the simulations sound and analytical, the strategies formulated are also free from human biases. All this ensures that investments perform optimally,” adds Andal Srivatsan. Furthermore, Zeva Astras’ AI and Deep Machine Learning algorithms and readings are updated every second, enabling the platform to make sound decisions faster, thereby giving an edge to their clients. “At an ideological level, the USP of Zeva Astras is that we keep the interest of our investors above everything,” says Basavaraj.
While today many fintech startups and firms are concerned about the volatility in the market and the impact it will have on the investments of their users, Zeva Astras believes this has doubled up to become an opportunity to showcase their potential.
“Markets are volatile and the investors are confused. Our tech and skills as wealth managers come into play here. We not only infuse confidence among investors, but also help them make the most of their investment journeys,” say the team at Zeva Astras, signing off.
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