The Indian mutual fund industry, reeling under the pressure of global liquidity crunch, saw huge redemptions at the beginning of last year. But with the equity market improving, fund houses witnessed decent inflows. The total assets under management (AUM) for the mutual fund industry stood at over Rs 4.6 lakh crore in January 2008. That surged to over Rs 8 lakh crore in November 2008.
The market regulator, Sebi, too came out with streak of measures to empower investors. Simplified norms made it easier for retail investors to put money in mutual funds. In June 2009, Sebi announced the move to abolish the entry load from August 1, 2009. Independent financial advisors and distributors, integral parts of the Indian mutual fund industry, gradually stopped selling mutual funds and instead opted to sell insurance products, as their commission came down from 2.25% to just 1%.
Despite the ban on entry load, fund houses saw sustained inflows in income schemes as banks and corporate houses started to park their surplus money in mutual funds. Equity schemes, however, started witnessing huge inflows from August that continued till November last year. However, market players say the surge in the AUM of the mutual fund industry in the last few months was because of market appreciation and not due to fresh inflows from the retail investors.
The market regulator came out with another important announcement that there should be parity among all investors while paying the exit load. It was observed that fund houses were making a distinction among unit holders by charging differential exit loads based on the amount of subscription. This announcement also came as a breather for the retail investors as they will now be at par with other mutual fund investors, especially high net worth individuals.
To further facilitate retail investors and increase the reach of mutual funds across the country, Sebi declared that mutual fund schemes can be transacted through the stock exchange infrastructure. Both the exchanges—the NSE and the BSE—have started their platforms for buying and selling mutual fund units.
With improving economic conditions, coupled with encouraging performance of the markets and online platforms, distributors are now aggressively lining up various mutual fund products for 2010.
Source: http://www.financialexpress.com/news/Column---Regime-change--in-favour-of-retail-investor/562788/
The market regulator, Sebi, too came out with streak of measures to empower investors. Simplified norms made it easier for retail investors to put money in mutual funds. In June 2009, Sebi announced the move to abolish the entry load from August 1, 2009. Independent financial advisors and distributors, integral parts of the Indian mutual fund industry, gradually stopped selling mutual funds and instead opted to sell insurance products, as their commission came down from 2.25% to just 1%.
Despite the ban on entry load, fund houses saw sustained inflows in income schemes as banks and corporate houses started to park their surplus money in mutual funds. Equity schemes, however, started witnessing huge inflows from August that continued till November last year. However, market players say the surge in the AUM of the mutual fund industry in the last few months was because of market appreciation and not due to fresh inflows from the retail investors.
The market regulator came out with another important announcement that there should be parity among all investors while paying the exit load. It was observed that fund houses were making a distinction among unit holders by charging differential exit loads based on the amount of subscription. This announcement also came as a breather for the retail investors as they will now be at par with other mutual fund investors, especially high net worth individuals.
To further facilitate retail investors and increase the reach of mutual funds across the country, Sebi declared that mutual fund schemes can be transacted through the stock exchange infrastructure. Both the exchanges—the NSE and the BSE—have started their platforms for buying and selling mutual fund units.
With improving economic conditions, coupled with encouraging performance of the markets and online platforms, distributors are now aggressively lining up various mutual fund products for 2010.
Source: http://www.financialexpress.com/news/Column---Regime-change--in-favour-of-retail-investor/562788/
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