In addition to regular and direct plans, SEBI is said to be looking to introduce a third plan in mutual funds called e-commerce plan to be sold through e-commerce websites like Flipkart, Amazon and Snapdeal, Economic Times reported on Monday.
Sources privy to the development told Cafemutual that the TER of such schemes would be somewhere between direct plan and regular plan.
These ideas came up at a meeting of SEBI Chief U K Sinha, Nandan Nilekani (who is heading a committee to suggest measures to reduce costs in mutual fund) and officials of e-commerce companies such as Flipkart, Scripbox, FundsIndia.com and Paisabazar.com recently held in Bengaluru.
Earlier in July, SEBI Chairman had said, “The e-commerce industry in India has grown by CAGR of over 48% in the past few years. In fact, in the coming decade, it is expected to grow at a CAGR of 45%. India is a market where large number of people use such platforms to buy goods and services. I am sure all of us would have participated in at least one e-commerce transaction. Why can’t mutual fund industry provide a similar service to investors? 99% of people are dependent on someone’s help to buy mutual fund schemes. There is some disconnect between the ability of customers using such technologies and what MF industry has provided.”
Cafemutual spoke to a few AMC officials and distributors to get their perspective on e-commerce NAV.
The CEO of a large fund house is of the view that having a third NAV can create confusion among investors. “Introducing a third NAV can confuse investors who are already in a dilemma because of too many schemes. Only a handful of investors invest directly. The proposed online NAV can confuse these net savvy investors.”
A Mumbai based distributor feels that selling MFs on e-commerce schemes serves no purpose. “Why would an investor buy a mutual fund scheme from Flipkart if he can buy it directly through AMC website at a cheaper NAV? Typically, people do research on pricing before buying any product.”
However, some officials have a different view. The sales head of a foreign fund house believes that this move will help the growth of mutual fund industry. “The mutual fund industry can grow exponentially if it leverages the reach of e-commerce distribution. However, I fail to understand the logic behind online NAV. The distribution can be strengthened through regular NAVs also.”
Dinesh Khara, MD & CEO, SBI Mutual Fund points out that SEBI wants fund houses to reach out to a large number of investors. “The cost of acquisition can come down through online sales. However, such a channel should be restricted to distribution of simple products only. One needs proper guidance of an advisor to build a comprehensive investment portfolio.”
