Sector funds customer analysis: strategies to improve fund flows and expand customer base

Abstract

This project is an attempt to analyze the sector mutual funds for Realm Investments and understand the reason for the net outflow that they are experiencing vis-à-vis their competitors. This project is jointly driven by the academic and business interests of the incumbent participants. Since Realm has varied sector funds and their corresponding customer data, for the analysis purpose, we selected the Natural Resources and the Communications Sectors based mutual funds. Accordingly, through this project we have analyzed these two sectors and also the aggregate sector funds for Realm to come up with our recommendations. The analysis was performed primarily in three steps:? Competition Analysis in the Sector funds industry for the year 2006? Customer Profiling for Realm in two of its two sectors - Natural Resources and Communications? Analysis of Sector ETFs a product that Realm currently doesn t offer As per the study, we have seen that returns for the funds is the major deciding factor for inflows and ETF are more luring to customers than the active sector mutual funds due to the inherent cost benefits accruing due to passive management.