India is where smart money should be: Mirae Asset Global Investments

Mirae Asset Global Investments is looking to further leverage its India presence by launching more India-focused funds in the US, Australia and Europe, says Young Kim, President and Chief Global Officer. In an interview with Abhishek Kumar, Kim says that even as short-term investor interest has shifted towards AI and tech stocks in the US and China, India remains an attractive long-term opportunity for global investors. Edited Excerpts:

 

What are your plans for the next phase of growth in India?

 

We have a firm belief that India’s growth story will only get stronger, and we want to be part of it. For instance, at the group level, Mirae Asset Capital Markets acquired Sharekhan last year. We also have a presence in the NBFC and alternative investment space. Efforts are on to create synergies between these entities. ETF is the other focus area. We see ETFs as a game-changer, not just in India but globally, and are making it a high-priority initiative for the next few years.

 

How do you see the India market? Are there plans to further leverage your presence here by offering more India-centric products to your international clients?

 

Globally, India is a standout. The market has cooled off a bit lately after a strong couple of years. While globally the focus is on artificial intelligence (AI) and technology stocks in the US and China lately, India is a good opportunity for long-term investors.

 

The fundamentals are solid. Young demographics, rising GDP, and huge growth potential. Companies are moving manufacturing here, and that’s a big deal. We are capitalising on this by launching India-heavy products for international markets, US, Australia, Europe. Our pitch is simple. If you want exposure to a high-growth emerging market with a decade-long runway, India it is. The last six months might have been soft, but over two, five, or ten years, this is where smart money should be.

 

Where does the Indian market rank in your global portfolio? Is it in the top three markets for you in terms of business?

 

India is right at the top, alongside the US and China. It is a massive economy, projected to be the third largest by 2030, and its scale is unmatched among emerging markets. Rather than spreading ourselves over smaller markets, the focus in India is justified as it offers much more. Ever since we made our debut in 2008, we have been focused towards continuously enhancing our portfolio across investments, securities, venture capital and lending.

 

Are you leaning into specific investment themes, like AI or technology, in your global funds?

 

AI’s a massive opportunity. It is reshaping everything. We’re not just investing in it, we’re using it ourselves. AI has made it very easy to analyse incredible volumes of data and increased efficiency.

 

Globally, we have bought into AI-driven companies, like a robo-advisory firm in Australia called Stockspot, and plan to launch AI-managed ETFs in the US. It’s not just a US or China thing. India’s part of this too. Our index company here ties into our AI efforts, and we are hiring talent across Korea, India, and Australia to push this forward. Beyond AI, we are watching humanoid robotics and automation, but AI’s the core and it’s here to stay.

 

With uncertainties like potential US tariffs looming, how do you assess the risks to global equities, and does this affect your strategy?

 

Conversations around tariffs bring in a lot of uncertainty which is not good for the equity markets. The entire unpredictability around this has rattled the markets as equities need stability to thrive. However, it’s not all bad. It can create a buying opportunity for savvy investors. We are watching closely, but our strategy stays long-term. Much like our long-term perspective for India, volatility would just be noise when you’re focused on a five- or ten-year horizon.

 

In India, you don’t have a banking parent for mutual fund distribution like some competitors. Does that put you at a disadvantage?

 

Over the years, we have built strong relationships with banks, securities firms, and other distributors, and we have got our own sales team to help in our distribution. Our edge is our products. Ultimately, what matters more to investors is how we can add more value. Take our covered call strategy, it’s got $20 billion globally, with $8 billion in a single Nasdaq product. It is stable, pays monthly income, and cuts volatility. We want to bring that to India.

 

For distribution, digital is huge for us, about 20 per cent of our assets come from it, and that’s growing fast. We have got an app, a website, and even WhatsApp trading, which is pretty unique.

 

Do you see AI eventually taking over the role of fund managers entirely?

 

It’s already transforming the job. I used to have teams dig up data for me, now I just ask ChatGPT and get it instantly. It’s not replacing fund managers yet, it’s empowering them to take more accurate decisions backed by detailed data and analysis. Decisions still need a human touch. AI might miss context or nuance, but it’s cutting out grunt work. Look at the US, passive funds are leaning heavily on AI, and active managers are using it to shrink teams from ten to one smart person with the right tools. Twenty years ago, AI beat a human at Go, something we thought impossible, and now it’s everywhere. Full automation’s coming, think robo-taxis. But for now, fund managers will shift to higher-level strategy while AI crunches the numbers. Singularity? Hard to say, but it’s closer than we think.

 

What makes your approach in India unique compared to other players, and how do you sustain it?

 

We are different because we are patient. As a private company, we don’t answer to quarterly pressures or pull profits out, we reinvest everything. Our Chairman is a huge India fan, he sees the long-term story and doesn’t need quick cash-outs. Look at our numbers, last year, we hit $70 million in operating income here, and this year could top $100 million. That’s organic growth, tough, but sustainable. Unlike some of our competitors, we are in for the long haul. In Australia, I was told not to worry about profits for five years, just build. Here, we’ve gone from breaking even to strong gains because we stuck it out. That’s our edge: patience and belief in India.

 

You’ve got a wide range of offerings, but are there gaps, like portfolio management services (PMS), that you plan to fill in India?

 

In India, we have focused more on the pooled asset concept through Alternate Investment Funds (AIFs) as against individual asset management through PMS. PMS, with its discretionary and high-net-worth focus, isn’t our priority at the moment. We’re more about broad-based products, ETFs, mutual funds, that scale across investors. Our securities arm, Mirae Asset Capital Markets, handles wealth management and PMS, and that complements what we do. There’s some overlap, so instead of duplicating efforts, we let them distribute our funds to those clients. Our strength is in creating innovative products that are accessible to a broader investor base.

 

Can you elaborate on how you plan to roll out these initiatives, particularly with ETFs? What’s your strategy?

 

Our approach isn’t just about jumping on the ETF bandwagon. We want to do it right. People sometimes misunderstand ETFs as purely passive investments, but that’s not our vision. We’re exploring the development of active ETFs alongside our mutual funds, leveraging our research and investment teams to generate alpha. I’ve spent years as an active fund manager, working globally, Korea, India, US, UK, Brazil, you name it, and I’ve seen how ETFs can be more efficient and transparent for investors. Take Korea as an example, ETFs have outpaced mutual funds in efficiency, and I believe India will follow a similar path. Our plan is to use ETFs as a vehicle to deliver value, active management in a cost-effective, scalable format. ETFs let us reach more investors with lower costs and greater clarity, which is why we’re so excited about them.

 

Do you have specific targets for how much of your assets under management will come from ETFs versus active mutual funds in India over, say, the next three to five years?

 

It is tough to provide exact numbers because it hinges on what investors want. But we are seeing trends. ETFs are gaining traction as people realise they are less expensive and more efficient than mutual funds. While active mutual funds continue to dominate thanks to their established presence, we’re also seeing strong parallel growth in ETFs. In Korea, investors moved toward ETFs once they saw the benefits, and I think India’s heading the same way. We’re working hard to educate both institutional and retail investors about this.

 

There are regulatory hurdles, though, like restrictions on global ETFs due to currency issues. But the framework is opening up. Transparency is key with ETFs, and that’s something regulators and investors alike value. Over time, I’d expect ETFs to take a bigger slice of our AUM as awareness grows.