In an episode of the Simple Hai! podcast hosted by veteran finance journalist Vivek Law, Ganesh Mohan, CEO of Bajaj Finserv Asset Management, shared candid insights into his personal journey, investment philosophy, and vision for the Indian mutual fund industry. Drawing from nearly two decades in global consulting and his current role leading a rapidly growing asset management company, Mohan discussed how trekking taught him life lessons applicable to investing and why he believes India’s mutual fund sector is poised for explosive growth.
A Journey Rooted in Humble Beginnings
Ganesh Mohan traced his upbringing to his family’s forces background. His father served in the Army, while his mother was a school teacher. This unique combination gave him access to quality education and good facilities for sports, but with limited financial resources. He credited this upbringing for instilling humility and a grounded perspective. Mohan emphasized that such an environment taught him to appreciate simplicity and focus on lifelong learning—values that continued to guide his career and leadership style.
Lessons from Trekking: One Step at a Time
Trekking, according to Mohan, was more than a hobby—it was a metaphor for life and investing. He described the rhythm of climbing a mountain, starting at a faster pace and gradually adjusting to a steady tempo. Being surrounded by nature in calm and humble settings made him realize how small humans are in the larger scheme of things. This immersion allowed him to think clearly and creatively, leading to some of his best ideas. Mohan drew parallels between trekking and investing: both require patience, focus, and perseverance.
Transitioning from Consulting to Asset Management
When asked about his shift from a global consulting firm to India’s mutual fund industry, Mohan highlighted the immense growth potential as the primary motivation. He estimated the mutual fund sector would grow at a minimum of 20-25% annually over the next decade and beyond. Despite 5 to 5.5 crore investors currently, he argued there should ideally be 25 to 30 crore investors considering the widespread fixed deposit holders with significant capital. Having worked with global asset managers, Mohan saw an opportunity to introduce international best practices, especially in behavioral finance, to India’s relatively young mutual fund ecosystem.
The Power of Behavioral Finance: A Differentiator
Bajaj Finserv Asset Management’s rapid growth—accumulating nearly Rs 20,000 crore assets under management (AUM)—was driven by a focus on investment innovation. Mohan identified behavioral finance as a critical, yet underexplored area in India. Unlike traditional economics, which assumes rational market participants, behavioral finance acknowledges human emotions and biases that influence investment decisions. Mohan explained how both investors and fund managers are prone to such biases, and his firm introduced tools and templates to minimize these effects. This behavioral finance approach has been a key differentiator, helping them navigate market cycles and capture opportunities effectively.
The Untapped Potential of India’s Mutual Fund Industry
Despite the impressive rise to nearly 5 crore unique investors and Rs 70 lakh crore AUM, Mohan emphasized the journey to universal investing is far from over. India has over 50 crore Aadhaar-enabled PAN card holders, indicating the mutual fund market could potentially expand tenfold. He described mutual funds as a “beautiful, well-regulated, transparent, and low-cost” wealth creation tool but pointed out a glaring gap in distribution. With only about 80,000 active mutual fund distributors compared to over 30 lakh life insurance agents, distribution remains a major bottleneck to growth.
Turning Savers Into Investors
One of the biggest challenges Mohan identified was encouraging Indians to move beyond traditional savings accounts, where nearly Rs 20 lakh crore sits earning low returns of 3-3.5%, often below inflation. He highlighted the launch of “Savings Plus,” a facility leveraging the Account Aggregator mechanism to analyze surplus balances and suggest deploying these funds into liquid or overnight mutual funds for better returns. According to Mohan, this shift could save India roughly Rs 800 crore annually in lost returns, equivalent to around $10 billion—a figure comparable to foreign institutional investors’ recent market withdrawals. Addressing this inefficiency could be a game-changer for India’s wealth creation.
Changing Mindsets and Expanding Distribution
Mohan noted two common reasons small investors hesitate to invest in mutual funds: a misconception that mutual funds are only for equity exposure and a conservative mindset to keep money idle in savings accounts for emergencies. He advocated educating investors about debt mutual funds and liquid funds, which offer liquidity and better returns. Additionally, he stressed the need to increase and support distributors with incentives, including reducing systematic investment plan (SIP) ticket sizes to as low as Rs 250, a measure currently under SEBI consideration. The goal is to democratize mutual fund investing, making it accessible and affordable for all Indians, not just the wealthy.
Navigating Market Corrections with Confidence
Reflecting on recent market corrections, Mohan observed that many investors who joined post-COVID had not experienced significant downturns until recently. Yet, despite a 10,000-point fall from market peaks, investor flows remained resilient. He suggested that such corrections should be seen as entry points for net buyers rather than triggers to exit. Mohan encouraged advisors to guide investors through volatility by expanding allocations during market dips, reinforcing the need for strong advisor support to help investors avoid emotional decision-making.
Looking Ahead: A Cautious but Optimistic Outlook
Using a Formula 1 racing analogy, Mohan described the last two years as a “straight section” where growth accelerated. He predicted the near future would be a “curve,” demanding caution due to international uncertainties like geopolitical tensions and changing trade routes. While domestic economic issues appeared manageable, global factors would contribute to market volatility in early 2025. He believed clarity would emerge in the latter half of the year, enabling markets to find their direction.
Advice for New Investors
For those starting without advisors, Mohan recommended aligning investments with time horizons. Short-term needs (3-6 months) should avoid equity; medium-term goals (2-3 years) suit debt funds; and long-term investments (3+ years) can include equity funds. He advised beginners to start with index funds for simplicity and diversification, gradually expanding to multi-cap and flexi-cap funds as comfort and understanding grow. He likened this progression to building a balanced meal, adding specialized “ingredients” like sector or thematic funds over time.
The Role of Advisors: “Advisor Alpha”
Mohan highlighted a persistent gap between mutual fund returns and investor returns—often 2.5-5% annually—caused by investor behavior such as panic selling and stopping SIPs during downturns. He coined the term “Advisor Alpha” to describe how skilled advisors act like Sherpas, guiding investors safely to their financial goals by helping them stay invested and avoid costly mistakes.
A Personal Note: Music and Discipline
Beyond finance, Mohan shared his passion for classical music, learning Carnatic and Hindustani styles from his grandmother, a Carnatic violinist. Although his role as CEO limits practice time, he often uses travel moments for music, reflecting his belief in balancing work and personal interests.
Ganesh Mohan’s insights reveal not only the promising future of India’s mutual fund industry but also the critical role of behavioral understanding, distribution innovation, and investor education in unlocking India’s full wealth creation potential.
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