Mutual funds: Future is very B…..!

Depending on your point of view you can decide what is ‘B’.

Let us take the word as BRIGHT. How can this happen? Well brokers can get excited about earning some money so they drop brokerage charges to 0.5% per transaction (which is what they charge on equity shares) and do the transaction. The greatest advantage for brokers is this is a COMPLETELY RISK FREE transaction because the units can only be redeemed through the fund house. Chances of a client cheating the broker in case of mutual funds is zero. Well almost.

Only lower end customers, and non urban India customers will find it attractive to go to a broker (I doubt whether they are capable of giving buy and sell advice, but will do it anyway!) but the brokers will push and prod so the amount of money that gets invested into mutual funds will jump. Fund houses will use this channel real hard – a big bunch is sitting there without any work anyway – so all funds will collect a lot of money and there will be a lot of activity. The fund house, the registrar, the custodian, the broker, the banker, the demat service provider will all make money for sure. If the investor makes money, it will be surely nice.

soon i will post Mutual funds: Future is very Bleak…that is a promise..!!

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One Response to “Mutual funds: Future is very B…..!”

  1. Subra,
    I was wondering how have you been silent on this subject. Well money makes money.

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