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SEBI recently approved a regulatory framework for the new asset class. The new asset class aims to bridge the gap between MFs and PMS in terms of flexibility in portfolio construction.
The regulator said, “The new product aims to provide investors with a professionally managed and well-regulated product that offers greater flexibility, higher risk-taking capabilities for higher ticket size, while ensuring that appropriate safeguards and risk mitigation measures are in place. For instance, safeguards for the new product will include: no leverage, no investment in unlisted and unrated instruments beyond those already permitted for mutual funds and derivatives exposure limited to 25% of AUM for the purposes other than hedging and rebalancing.”
Cafemutual talked to industry experts who share their views on their expectations from the new asset class.
Here’s what they have to say.
Swarup Mohanty, Vice-chairman & CEO, Mirae Asset MF said that the new asset class presents new and exciting opportunities for AMCs. He shared with us that his company is looking forward to create a backend framework for the execution of the new asset class.
Lakshmi Iyer, CEO - Investment & Strategy, Kotak Alternate Asset Management feels that the new asset class will give opportunities to investors to invest in AIF like schemes at a lower ticket size and keep the excitement for investment going.
Agra MFD Shifali Satsangee of Funds Vedaa believes that the introduction of a new asset class is a good move by SEBI. She said that it will give mass affluent investors to invest in more experimental investment product. Also, many people who have experience of investing in mutual funds can spread their wings with these products.
Chennai MFD Chokkalingam Palaniappan of Prakala Wealth said that the new asset class will give tough competition to PMS. He said that as the new product will be managed by leading AMCs with good research team, it will eliminate some PMS players.
The MFD also believes that the new asset class will satisfy the evolving needs of investors who want to explore something new every time.
