The regulator is happy about the performance of equity schemes.
Taking note of the superior fund performance and the industry's ability to handle the debt market shock well last year, SEBI chief U K Sinha lauded the industry in his speech at the 10th CII MF Summit.
SEBI chief pointed out that the industry has also complied with SEBI's diktat of limiting sectoral concentration in debt funds very well.
On fund performance, he said "During three year period, 85% of equity funds have outperformed their benchmark while during a five year period 88% of equity funds have outperformed their respective benchmarks. Also, 80% of equity funds have outperformed the broader indices. Not many people know about this".
Talking about the crisis which hit debt funds during the sudden rate hike in July last year, Sinha said "In 2008 it was known that the crisis is coming. However, in July it was a sudden shock. With the help of government and RBI, the industry managed the situation well. Fund performance has also improved over the long term and thus the industry has justified its existence," he added.
To further spur the growth of the industry, SEBI has recommended to the government to allow PSUs to park money in private sector mutual funds as well. Currently, PSUs are only permitted to park money in schemes of AMCs promoted by PSUs.
While addressing the media on the sidelines of the event, U K Sinha said that SEBI has framed rules on real estate investment trusts and infrastructure trusts. It has recommended to the government that pass through status be given to these trusts.
SEBI has also recommended to the government to allow pension funds to park certain potion of their money in mutual funds. The regulator has also made certain non-tax related recommendations to the government.
Sinha also urged the industry to put their heads together to expand the reach of mutual funds through the online route. "The e-commerce industry has grown exponentially. Around 50% of railway registrations are done online. Currently only 5% of inflows are received from the online route. This should grow," he added.
