Are there too many schemes in the mutual fund industry?

Well it can be argued till the cows come home. Value fund, growth fund, large cap, mid cap, mid and small cap, large cap value, mid cap value, large cap growth, opportunities fund, special situations, price-earning ratio fund, equity biased balanced fund, debt heavy balanced fund,…..and a million such words are possible.

I can argue why so many schemes should exist and in the same breath argue why the existing sales force will not be able to distinguish between the schemes. In case of fund house they had said ‘We will invest in Value based equity shares’ – when SEBI asked them to define the word ‘value’ they dropped the word value!

If fund managers find it difficult to define the purpose of a fund how does one expect the sales person, the distributor and the common man to know the difference between different schemes. I have argued with a fund manager – saying ‘I can see value in the growth that this company will get’. Navin Rego of Managalore will agree with this!

In this background one has to see what SEBI can do. Sebi was in a good position to grill fund houses FAR, FAR before things came to such a sorry state. However having brought to this stage ….they may be doing something, well hopefully!

http://www.livemint.com/2011/01/05234332/Declutter-existing-products-M.html

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  1. During 2007-2008, there was a middle path to this – zero entry load on DIRECT investment. Informed investors, like me, could use this to benefit ourselves (if we didn’t feel the need to have an adviser/agent).
    I think this could have been continued instead of a complete ban on entry load. The fact is people are not very financially aware in this country and they have to be “directed” towards good investments (by incentivising the broker).

  2. profit and loss are pretty good ‘regulators’ of the market system.along with ‘natural’ laws of property rights protection,civilized society wouldnt need top down regulation at all.
    the black money hooha in india is weird.black money is useful.it is hoarded away in swiss banks,presumably.there it is lent out to businesses or borrowers looking for profits,thereby creating jobs and wealth. on the other hand,if it were not black and the govt had taken its pound of flesh ie taxes,the whole of it would have gone in paying salaries for bureaucrats and favoring chosen vote banks.ie it would have been consumed .black money is a decent thing.i do plenty of cash transactions all the time.why does the govt need to know how i spend my money?.i am redoing my house.if i pay in cash,the renovator will knock off the tax part.i am happy with that.why should the sarkar get a cut just because i am cleaning up my house? its beyond weird

  3. Last word!

    Sebi- Better if not beat

    IRDA—here to benifit insurance cos & strip Layman!
    were they sleeping wen ULIPS were ,is-sold!
    all bullshit

    IRDA sud be ashamed! Too little –too late!
    Pvt insurance cos repeating what blunders they did in West-now looting Indian Poor Man!!

    God! wen will this miss-selling stop!

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