Are there too many schemes in the mutual fund industry?
Well it can be argued till the cows come home. Value fund, growth fund, large cap, mid cap, mid and small cap, large cap value, mid cap value, large cap growth, opportunities fund, special situations, price-earning ratio fund, equity biased balanced fund, debt heavy balanced fund,…..and a million such words are possible.
I can argue why so many schemes should exist and in the same breath argue why the existing sales force will not be able to distinguish between the schemes. In case of fund house they had said ‘We will invest in Value based equity shares’ – when SEBI asked them to define the word ‘value’ they dropped the word value!
If fund managers find it difficult to define the purpose of a fund how does one expect the sales person, the distributor and the common man to know the difference between different schemes. I have argued with a fund manager – saying ‘I can see value in the growth that this company will get’. Navin Rego of Managalore will agree with this!
In this background one has to see what SEBI can do. Sebi was in a good position to grill fund houses FAR, FAR before things came to such a sorry state. However having brought to this stage ….they may be doing something, well hopefully!
http://www.livemint.com/2011/01/05234332/Declutter-existing-products-M.html