A long-standing bugbear for mutual funds investors has been product proliferation. Too many products, too many names, and too little systematic basis to figure which fund belonged where, and should therefore be compared with which benchmark and with which peer group. If every instance of under or over performance is explained away by how the fund is “different”, it does not do much for investor confidence in the product.
At a time when systematic investment plans are widely known and accepted as a desirable method to save and invest, Sebi’s circular that asks for specific and clear categorisation of schemes is a step in the right direction. How would the new classification scheme help the investor?
