Key Takeaway on Mutual Fund classification regulations by Nitin Agrawal, CEO, Mutual Funds, InCred Money, on the SEBI's circular
Key Takeaways:
1. Solution-oriented funds take a hit. We believe that most of the funds were not true to label as the portfolio construction was mainly in line with other funds not providing a more true to label solution to the issue
2. Life cycle funds is a welcome move in a way to promote the investor’s behaviour towards goal-based funds as it follows a glide path towards end-maturity perfectly aligning the time horizon and risk profile
3. Portfolio overlap is also a masterstroke though operationally intense. Now the portfolio needs to be more-aligned towards the end product category rather than being a general well-diversified portfolio
4. Sector Debt funds may help deepen the overall debt market by directing flows to growth sectors
5. Monthly Overlap disclosure will also bring in greater transparency in terms of overall exposure across various schemes and will help investors to avoid over-diversification across schemes having similar underlying exposure
Above views are of the author and not of the website kindly read disclaimer
