Last week, after years of debate, the Securities and Exchange Board of India embarked on a Swachh Bharat-type mission to declutter the Indian mutual fund industry. Such spring-cleaning is sorely needed. The MF industry has seen its fair share of ‘consolidation’ in the last decade but this has made very little difference to the number of schemes on offer. The 45 Asset Management Companies (AMCs) today offer over 1900 schemes between them.
Vaguely defined investment mandates add to this befuddling cocktail of choices. It is quite usual in the Indian context for a ‘bluechip’ equity fund to park a third of its portfolio in mid-cap stocks and for a liquid fund to invest in barely liquid AA-rated bonds.
