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Journalism of Courage
The Indian mutual fund industry is in poor shape and there is a need for an overall review of the working of the industry including its regulation, management structure, investment practices and performance, revealed a study.
The present tripartite management structure involves much duplication and it is neither economical nor effective from the viewpoint of supervision of the management. 8220;Retail investors have suffered from the incompetence of fund managers and their herd behaviour. The biggest shock was the US-64 crisis which caused heavy and widespread losses. On the other hand, some foreign-sponsored funds under world-renowned managements which had raised great expectations, proved to be a flop.8221;
These findings were revealed by a study carried out by the Society for Capital Market Research and Development led by L.C. Gupta.
MFs have failed as retail investors are not familiar with the schemes and products. In relative terms, there is much more unfamiliarity with MFs than with the share market among retail investors, he said.
