This refers to the editorial "Unhappy at 20" (June 28). Buffeted by overzealous regulators and revolving door type of investments by foreign institutional investor (FIIs), the performance of the indian mutual funds industry has been lacklustre and has given investors very poor returns. In fact, the stock market is, in a way, controlled by the FIIs, and mutual funds look puny in comparison. Whatever be the merit of doing away with entry load and role of the agents, the net results are that the mutual funds have no one to promote their products.
The CNX Nifty gave poor returns of 6.3 per cent in the last five years in equity funds. The FIIs virtually dictate the stock market and the mutual funds are often caught on the wrong foot. Unless the funds' base expands to take on FIIs, little will change. The assets of the mutual funds industry are gradually shrinking and the government should come out with tax incentives and take steps to ensure the growth of the funds. Investment in the mutual funds, particularly equity-linked savings schemes, would stop once the Direct Tax Code is implemented and the scope of Section 80C is constrained.
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The CNX Nifty gave poor returns of 6.3 per cent in the last five years in equity funds. The FIIs virtually dictate the stock market and the mutual funds are often caught on the wrong foot. Unless the funds' base expands to take on FIIs, little will change. The assets of the mutual funds industry are gradually shrinking and the government should come out with tax incentives and take steps to ensure the growth of the funds. Investment in the mutual funds, particularly equity-linked savings schemes, would stop once the Direct Tax Code is implemented and the scope of Section 80C is constrained.
M M Gurbaxani Bangalore
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number