Following a speculative report in a section of media about AMFI proposing to SEBI to launch a new benchmark index for MFs, the industry body has clarified that it has neither written to SEBI proposing introduction of dedicated index for MFs nor requested the market regulator to put a cap on stock weightage in index composition.
"The industry will continue to adhere to SEBI guidance on the capping of a single stock. Suffice to say, whenever any Mutual Fund launches a scheme, the fund house chooses an appropriate benchmark index which reflects the composition of the scheme's portfolio," AMFI said in a statement.
The industry body admitted in the statement that there are challenges in performance measurement as indices do not have a cap on stock whereas mutual fund schemes have a cap of 10% on a stock. Globally, index calculating agencies do prepare customized indices which comply with investment restrictions of the fund.
"However, this issue needs to be settled between fund houses and index calculating agencies", AMFI said.
AMFI further requested media houses to not publish such unverified news as this can lead to unhealthy market speculation.
