AMFI is in talks with
rating agencies to construct new benchmarks to enable fund houses to comply
with the new guideline on performance disclosure in advertisements.
Mumbai: To help fund houses to comply
with the new guideline on performance disclosure in advertisements of debt
funds, AMFI is talking to CRISIL and ICRA for constructing new benchmarks that
will be used for measuring the performance of debt funds.
“We are progressing on the
implementation. We are in talks with CRISIL and ICRA,” said, H N Sinor, CEO,
The recent SEBI circular requires that
debt schemes are required to display the returns of 10 year government security
and 1 year T-Bill. Fund houses say that the only roadblock is that currently
there are no benchmarks which track the 10 year government dated security and 1
year Treasury Bill.
“The only challenge is to show the
performance against 1 year T-Bill. There is no index which tracks T-Bill and 10
year government dated security. The 10 year GOI index keeps changing every
year. Someone has to create a new index which has the past data,” said a chief
operations officer of a leading fund house.
G-Sec Funds are currently benchmarked
against I-Sec LiBex.
Liquid funds will have to be
benchmarked against 1 year T-Bill. Currently all liquid funds are benchmarked
against CRISIL Liquid Fund Index while open-ended debt schemes are benchmarked
against CRISIL Short Term Bond Fund Index.
SEBI in its circular issued on August
22 had directed fund houses to show the performance of equity and debt schemes against
standard benchmarks like Sensex and Nifty in addition to the scheme benchmarks.
Analysts argue that comparing a sector funds performance vis a vis Sensex or
Nifty does not make sense.
Further, fund houses have decided to disclose
the performance of the second fund manger if a particular scheme is managed by
two fund managers.