SEBI's proposed mutual fund fee cuts promise to save retail investors thousands annually, but AMCs and brokers are bracing for a profit squeeze that could reshape India's fund industry.
The proposal is aimed at curbing distributor practices of unnecessary switching of schemes and pushing new fund offerings for higher commissions.
The regulator’s objective behind the move is reduce confusion for mutual fund investors, and deter asset management companies (AMC) from coming out with overlapping products merely to boost their assets under management.
Instead of looking at company fixed deposits and non-convertible debentures credit opportunities funds can offer better risk adjusted returns on post tax basis.
Mutual fund industry body AMFI is pandering to distributors once again. With complaints that distributors could lose out on clients when trading in MFs on the NSE and BSE, AMFI is now setting up MF Utility - an exclusive platform for mutual funds, reports CNBC-TV18's Mitra Joshi.