The mutual fund (MF) sector wants the government to modify the definition of equity funds to cover those investing at least 50 per cent in equity instruments, from the present limit of 65 per cent.
“Reducing the threshold limit would ensure asset allocation products with equitable risks are promoted, leading to penetration of debt markets and promotion of real balanced portfolios. It will encourage more numbers of investors with lower risk appetite to invest in funds,” goes a note sent by sector representatives to the finance ministry.
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