Consolidation gains

Sebi has taken the right call on merger of mutual fund schemes

The Securities and Exchange Board of India’s (Sebi’s) initiative to redefine mutual fund categories and induce asset management companies (AMCs) to merge similar schemes is a welcome step, driving long-pending consolidation in an industry that has hitherto ignored informal requests for ending the surfeit of plans. In the long run, it will lead to more clarity and should result in lower expense ratios, making it easier for investors to select funds that suit their specific aims. The Indian mutual fund industry is one of the world’s largest and consists of 42 AMCs, which together manage over 55 million folios and