Thursday, September 16, 2010

SEBI Chairman's Thought Provoking Points on MFs

Over 200 luminaries were present at SEBI's workshop for Mutual Fund Trustees and Independent Directors of Asset Management Companies yesterday, at Mumbai. SEBI Chairman, Mr. Bhave made a couple of interesting observations:

1. Profits of Asset Management Companies have gone up four-fold since SEBI banned entry loads.

2. People talk of investors withdrawing money from mutual funds - decline of Rs10,000 crore in 1 year. The gross figures are - Addition Rs63K; Reduction Rs73K. If Rs63,000crore of new money came into mutual funds - then taking a saving of 2% (on account of entry load being banned), investors have benefited to the extent of Rs1,260crore. Which other regulatory move has given back Rs1,260 crore to investors in 1 year?

Definitely worth pondering over.

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