NJ Mutual Fund's Uphill Battle in a Scale-Driven Market
NJ Mutual Fund entered the market with a powerful advantage. It had the backing of NJ India Invest, India's second-largest mutual fund distributor. This ready-made launchpad is something most new entrants can only imagine. Yet, more than four years after its debut, the fund house has gathered assets of just ₹7,119 crore. This amount is not insignificant on paper. However, the picture changes dramatically when compared to peers.
Peers Outpace Despite Weaker Distribution
Helios Mutual Fund, Zerodha Mutual Fund, and Bajaj Finserv Mutual Fund launched around the same time or even later. They have built significantly larger asset bases without NJ's distribution muscle. Bajaj Finserv Mutual Fund reported assets under management (AUM) of ₹32,115 crore as of December-end. Zerodha Mutual Fund had ₹9,969 crore. The contrast becomes even sharper upon closer examination.
About 80% of NJ Mutual Fund's AUM came from its sponsor, NJ India Invest, as of March 2025. This highlights the fund house's heavy dependence on a single channel. "Given the distribution strength, in a four-year period, the assets would have been on the lower side," said Srikanth Meenakshi, founder of Primeinvestor, a mutual fund research platform.
Leadership and Strategy Hurdles
Flows into a new asset management company often rely on a fund manager or chief investment officer with a strong track record. Samir Arora built credibility through his alternates business before expanding into mutual funds. Sunil Singhania followed a similar path. In NJ Mutual Fund's case, the investment leadership lacks such a prior fund management record. Nirmay Choksi, the CIO, is on his first stint on the fund management side.
The fund house also experienced early leadership churn. Anand Shah, a well-known industry executive appointed as CEO, exited after just over a year. Vineet Nayyar now holds the CEO position.
Unlike some peers, NJ Mutual Fund chose to build its business entirely from scratch. It did not acquire an existing asset management company. Navi Mutual Fund and WhiteOak Capital, for example, received an initial AUM boost through acquisitions. "NJ built its business organically, choosing not to acquire an existing asset management company. As a result, its products are largely sold only through its own captive distribution network, with limited interest from external distributors," said a large distributor who requested anonymity.
The Niche Quantitative Approach
NJ Mutual Fund follows a rule-based, quantitative fund management style. It relies on predefined parameters like momentum, return on capital employed (ROCE), and volatility to filter stocks. "A quant-based fund management style is very niche and usually does not become a part of an investor’s core portfolio. It is added for diversification, which is also why NJ Mutual Fund is not able to collect huge assets," said a mutual fund executive from another asset management company.
An NJ Mutual Fund spokesperson stated the AMC is a wholly owned subsidiary of NJ Wealth and naturally leverages its distribution network. "But we are not enforcing our distributors to just sell our products. We are pitching our schemes as a complement to investors’ overall active fund portfolios, positioning them as genuine diversification opportunities," the spokesperson explained.
Limited Product Lineup and Mixed Performance
Another factor weighing on asset growth is NJ Mutual Fund's limited product lineup. While many fund houses launch multiple schemes to gather assets, NJ Mutual Fund has stayed restrained, offering only five schemes. One of these is a liquid fund designed to facilitate systematic withdrawal plans (SWPs) into its flexicap fund. "We are not launching multiple schemes and do not intend to roll out a myriad of products merely to garner AUM without prioritizing customer centricity," the NJ spokesperson said.
However, fewer schemes alone do not necessarily limit scale. PPFAS Mutual Fund also runs a limited lineup, but its flagship flexicap fund alone manages about ₹1.3 trillion and has delivered strong returns. NJ Mutual Fund's performance has been mixed. Its flexicap fund has delivered a CAGR of 15.92% since inception in September 2023, below the benchmark return of 17%. Its balanced advantage fund has performed better, posting a three-year CAGR of 12.83%, compared with the benchmark return of 10.98%.
Distribution Dynamics and Market Reality
Investors and distributors closely watch whether a fund house is being pushed primarily through captive channels. In FY25, NJ India Invest recorded mutual fund inflows of ₹26,467 crore across the industry. Of this, only 2.8% went into NJ Mutual Fund, indicating an open-architecture approach. By comparison, State Bank of India, the country’s largest mutual fund distributor, saw inflows of ₹27,061 crore in FY25, of which 96% went into SBI Mutual Fund.
India remains heavily reliant on distribution. The share of direct plans in total SIP AUM has risen from 12% in March 2020 to 21% in March 2025, according to the Association of Mutual Funds in India (Amfi). Yet, the majority of inflows still come through distributors. NJ Mutual Fund's journey underscores the challenges of scaling in a market where performance, track record, and broad distribution appeal are critical.
