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Showing posts from April, 2018

Categorization & Rationalization of Mutual Funds

In the recent two months, investors in Mutual Funds have been receiving communication from their respective fund houses on change of fund names, returns, benchmarks or even mergers with other funds. These changes are as a result of our capital market regulator, SEBI's constant endeavor to make the fund selection process investor-friendly. Background Today India has about 40+ fund houses and 3000+ schemes, often carrying names that do not reflect the underlying fund characteristic. This presents great challenge to a retail investor to navigate the ocean of schemes & identify the right funds for him/her. To simplify this process, SEBI in Oct 2017, mandated that all fund houses must categorize their schemes under 5 broad schemes Equity Debt Hybrid (Equity+Debt) Solution-oriented (Retirement, Children's fund) Others (Fund of Funds, Sector/Thematic & Index Funds) The most useful change by SEBI is allowing only ONE fund under each category by a fund house. This m