We all know who writes columns of lies, lies and honest lies, so here is a dig…
Look at the Quantum Mutual fund advertisements which appeared in the national press. The advertisement says “we have eliminated distribution commission…” so your money works for you.
There are 2 types of charges that a customer pays in a mutual fund scheme. One is the sales cost and one is the management of funds (amc cost).
Whether right or wrong, it was SEBI that abolished the ‘sales costs’ also known as ‘entry load’. Only person who can take credit for this (rightly or wrongly) is the ex-chief of SEBI, Mr. Bhave.
The asset management charges of most mutual funds is in the region of 2.5%p.a. – however as there is a sliding scale the bigger funds charge less. So while a quantum mutual fund would charge you 2.5% p.a. some funds like Hdfc Top 200 would charge you 1.86% p.a. This means there is a saving of 0.64% – and this gap would keep increasing.
If you go to www.myiris.com, www.moneycontrol.com, www.valueresearchonline.com – you will be able to find out whether Quantum was the best fund to invest or whether it was Top 200, I pru Discovery, I pru Dynamic, Reliance Growth…YOU need to take the call.
The ad then says ‘We did not launch numerous schemes to please the distributors’ – well Tata Mutual fund got the name of a ‘New scheme factory’ – valueresearchonline.com gave them that name. Sure many fund houses launched many schemes, but the client SHOULD have exercised the OPTION of not investing, is it not? In a crowded market it is the MARKET’S job to separate the men from the boys…
am expecting distributors of national level at Chennai to react to this news item!
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