Mutual Funds – A Rough Road Ahead

Yesterday,[saturday] I have few reasons to visit office of Karvy Computershare Pvt Ltd which is registrar of number of mutual funds.There was good crowd in the office and nevertheless to say that most of them were there to put down their papers of mutual fund investments or stop their systematic investment plans and something similar..I am sure there won’t be different situation at CAMS offices also.

Now adays Mutual fund industry is going through a strange situation..AMC,Investor & distributor triangle have broken down sharply..Investors are disappointed while distributors are looking for other feasible business opportunities and one big section of distributors is not willing to continue to work in this profession.

Regulators are much strict about mis selling.They needs to be but its also matter of debate – Mis-selling or Individual views.As its possible that there will be multiple views for single mutual fund scheme..One may find it mis-sold and other may find it appropriate view.E.g – There are number of schemes have turned bad after distributor have sold them ..it doesn’t mean that such schemes have mis sold though investors may think so.

Recent moves about mutual funds will remove [not totally] speculators from mutual fund industry but thing to note is that speculators are as essentials to keep the things liquid and removing speculating components will actually hurt the industry [& indirectly investors also].

Ocean will never dry up but big fishes have already started focusing other alternatives like focusing more on direct equity / commodity businesses and it seems that Road Is Rough Ahead for mutual fund industry.