Mutual funds are a vehicle for investing in stocks and bonds. It is not an alternative investment option to stocks and bonds, but rather it pools the money of several investors and invests this in stocks, bonds, money market instruments and other types of securities. Buying a mutual fund is like buying a small slice of a big pizza. The owner of a mutual fund unit gets a proportional share of the fund’s gains, losses, income and expenses. Each mutual fund has a specific stated objective (what the fund will invest in) which is laid out in its prospectus – the legal document that contains information about the fund, its history, its officers and its performance. The mutual fund regulations require that the fund’s objectives are clearly spelt out in the prospectus. Some popular objectives include equity (stocks), debt (fixed income securities) and money markets. Mutual Funds in India are managed by an Asset Management Company (AMC) that may have several mutual fund schemes with similar or varied investment objectives. AMCs hire a professional money manager, who buys and sells securities in line with the fund's stated objective. All AMCs Regulated by Securities and Exchange Board of India (SEBI) and funds are governed by a Board of Directors that is supposed to represent the shareholders' interests, rather than the AMC’s. More
Discipline and being true to its label have helped the fund in the past. However, going forward, its large size and SEBI restrictions on investment in overseas stocks could be challenges.
With just around 1,000 registered investment advisors in India, SEBI’s chase for unregistered investment advisors appears to go at a slow pace, even though it has regularly nabbed offenders. But SEBI chairperson Madhabi Puri Buch says that the regulator is working on this problem and a solution is expected soon
AMFI should have an ethics committee in whatever manner it sees fit, and that committee "must take action against individuals doing wrong things on a self-regulatory basis", the SEBI chief said.
A modest salary at the beginning of your career should not deter you from opening your investment account. Instead, first-time job seekers should focus on the advantage they have over others; the benefit of time. And that’s why equities make sense.
On May 28, 10 years ago, Parag Parikh Flexi Cap, the fund house’s flagship fund and its first scheme, opened up its doors to investors. But the fund house believes it has just got started.
Part of MC30, HDFC Short Term Debt Fund is well positioned to benefit in the current environment of high short-term yields. It’s also a good pick to get into before the interest rates start to fall
SEBI has observed that the brokerage and transaction charges of some schemes was more than the TER limits prescribed, which resulted in investors paying more than double the TER limit for the scheme.
The Reserve Bank of India started raining interest rates (repo rate) in May 2022. Since then, it has hiked the repo rate 250 basis points. Accrual funds benefitted from the rate hike cycle while, duration funds have been a mixed bag. Here, we analyse how debt funds responded to the rate hikes
If you want to take a duration call at this juncture, choose your options wisely.
After studying India’s Rs 40 lakh crore mutual funds sector, SEBI has unearthed data on performance, churn, and brokerage paid to justify some radical proposals to reimagine the total charges collected from investors. Moneycontrol takes a closer look at what the numbers revealed.
The inflows are predominantly from corporates, the Employees' Provident Fund Organisation, and high networth individuals.
The Delhivery stock kept making loud blips on the mutual fund radar with an 8 percent rise in the market. While Gati lost nearly 17 percent, the AllCargo Logistics stock gained around 18 percent year to date
Market sources told Moneycontrol that since the number of stocks and investment options are limited, a reasonable inflow in its NFO period will suffice for the fund.
“Not all is that bad,” say mutual fund industry officials, who Moneycontrol spoke with, on most of the proposals. The inclusion of brokerage costs, though, is a troubling recommendation for a few officials.
Investors now go to multiple entities for meeting different financial requirements. They also have to check whether they (the distributors) are certified by the capital market and insurance regulators. The insurance regulator’s planned move will act as a one-stop solution to their needs.
We can expect from the Fed interest rate cuts and money supply expansion to save the economy from this self-created downcycle and into the next cycle of high inflation.
The proposal followed investor concerns over growing underperformance of MF schemes. Some investors have turned to passive schemes given their low cost, absence of fund manager risk and possibility of achieving near benchmark returns.
In a consultation paper that SEBI issued on May 20, it has proposed setting up of internal surveillance systems in mutual fund houses to catch fraudulent activities. It wants fund houses to be more pro-active
If you don’t make money from your mutual fund scheme, should your fund manager be making any? That’s the idea behind the performance-linked fee, which promises to be a game changer. The challenge will be in its implementation.
If the proposal goes through, commissions are expected to fall by 25 to 50 bps. Low commissions may see new entrants change their minds, or become a sub-broker of a large national distributor.
TER accounts for the fees and expenses charged by asset management companies (AMCs).
AMCs are already under pressure from changes in taxation for debt mutual funds and the new proposal by the Securities and Exchange Board of India to bring a uniform total expense ratio (TER) will impact profits by 13 percent, or Rs 1,400 crore loss, according to Jefferies report released on May 19.