What’s the first thing you check before investing in a mutual fund? It’s past performance. But what if a scheme’s past performance is not relevant to what the scheme will do henceforth? That’s the question in front of many mutual fund investors these days as they grapple with dozens of emails by fund houses announcing their scheme merger plans.
Last year, capital markets regulator Securities and Exchange Board of India (Sebi) asked fund houses to align all their schemes—and merge or consolidate if required—to 36 categories.
Last week, Sebi issued guidelines telling fund houses how to showcase their past performances in case schemes are merged, as a result of this consolidation exercise.
There are different ways in which the mergers happen.
