SEBI has approved a hike in Expense Ratio ceiling by 25 basis points. Expense ratio is annual fee which is charged by AMC from MF schemes which it manages. This decision will make Big Fund houses smile as there income will increase at the cost of small investors' pocket. So called objective of this change is to help fund houses to tread during these turbulent times.
Can't understand how an inefficient, distributor friendly and investor unfriendly industry will thrive by charging more to investors. The basic reason for woes of MF industry is its inefficiency which culminates into high expense ratios. India still does not have a good low expense ratio Index fund. And Now SEBI by allowing more charges is only making industry more inefficient...nothing else...
However, One Good thing which SEBI has done is to make rule of clawing back Exit Loads charged to respective schemes which was earlier going into pockets of MF companies.
Can't understand how an inefficient, distributor friendly and investor unfriendly industry will thrive by charging more to investors. The basic reason for woes of MF industry is its inefficiency which culminates into high expense ratios. India still does not have a good low expense ratio Index fund. And Now SEBI by allowing more charges is only making industry more inefficient...nothing else...
However, One Good thing which SEBI has done is to make rule of clawing back Exit Loads charged to respective schemes which was earlier going into pockets of MF companies.
