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News From Press Making mutual funds less pricey

Making mutual funds less pricey

Source: The Hindu BusinessLine Sep 22, 2018

SEBI’s clamp-down on MF expenses is great for investors, but mixed news for the industry

After coaxing, cajoling and counselling the Indian mutual fund industry to bring down its costs to investors, the Securities Exchange Board of India (SEBI) finally took matters into its own hands this week. In an action-packed Board meeting, it revisited the cost and commission structure for mutual funds by announcing a new slab structure for scheme expenses, banning upfront commissions, asking AMCs to be more transparent on costs and tweaking the B30 allowance for assets sourced from smaller cities.

While these changes are certainly great for existing fund investors, they may turn out to be a mixed blessing for the growth and development of the fund industry.

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1 Comment
RANJAN D GUPTA · 3 weeks ago
1.what is the necessity to reduce TER when direct investment option is very much there. It is more logical to reduce expenses only for direct investment not for them who are taking all assistance and advice from Distributors. Leave it to the investors to make a choice whether he/she will be better off with direct investment or with the help of distributors.2. Reduction of TER can shake the mutual fund industry as well as stock market I massive adverse way if there will be loss of interest from all brokers, banks and IFAs. Consequently if flow in Mutual fund reduced then at the time of massive sell off by FPIs and FIIs mutual fund will not be able to provide the cousion to absorve the sell off and keep the market in balance. Inadequate flow in MF Can bring stock market crash and thereby all MF investor small or big has to suffer unprecedented wipe out of WEALTH. As a result a sentiment of fear will drive all investors away from further investment in Mutual fund. Possibly MF industry will go back to 2011/12. So it is my humble request to SEBI to revisit it's decision about TER
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