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POSTED BY ON October 4, 2010 1:12 pm COMMENTS (2)
Last year in August the SEBI had banned the Entry Loads on MF Schemes which had resulted in the big Chaos among the Mutual Fund House / Fund Managers. And MF schemes had turned into Sellers in the Booming Stock Markets since last year due to Outflow from there MF Schemes consistenly. Its like Equity MF had left out in this rally if they had more money, Markets & Stocks would had been more Higher then its today fetching more Returns for MF Investors ???
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definately helped . not only saving of 2-2.5% going to distributors/agents pockets, but i feel they stopped misselling mf to innocent investors. further we investors became more net savvy, and so more informative.
First of all, entry load ban has given investors a savings of 2.25% which otherwise was deducted as entry load charges.
Secondly, since the beginning of this rule, there is less inflow of money especially from retail participant as there are very few mutual fund distributors are in the market in this business. They’re leaving this as they can not meet even their expenses from very less commission given by company & most of the customers are not keen in paying fees to them.
But recently, many investors are back in investments & that too with long term horizon via SIP. They are investing in schemes with consistent returns over a period of time. Even employees of AMC are helping investors to choose schemes. That’s a very positive sign.
Very soon, you’ll see online investments in MF getting popular.
I think it will take some time to digest all the news rules & will help everyone (excluding MF distributors) in long-term.
Hope it will help you.
MoneySavingsHelp