Page 18 - Banking Finance April 2020

MUTUAL FUND

MUTUAL FUND

NEWS
NEWS
NEWS
NEWS
NEWS

AMFI expresses concerns customer account statement (CAS) net asset value (NAV) in recent times,
and declaration of Net Asset Value large-cap and blue chip funds should
regarding disruptions to
(NAV), daily scheme performance and be able to bounce back at a faster
mutual funds due to Total Expense Ratio (TER) may experi- pace. Quality businesses and industry
Covid-19 restrictions ence a delay. leaders with superior fundamentals will
always command a premium multiple
The Association of Mutual Funds of In- over the rest, and would be the first
dia (AMFI) expressed concerns regard- Equity mutual funds ones to see investment inflows on
ing several types of disruption for mu- schemes deliver 25% nega-
major dips, he added.
tual funds due to the restriction im- tive return to investors
posed to contain coronavirus pan- SEBI exhorts mutual fund
demic. amidst Covid-19 outbreak
Equity-oriented mutual fund schemes industry to build 'liquidity
As per AMFI, the government's direc- have given 25% negative return to in- buffer' for debt schemes
tive to reduce the employee strength vestors in month of march since a The Securities and Exchange Board of
by 50% will adversely affect mutual downtrend has been experienced India (SEBI) urged the mutual fund sec-
funds and allied services as well as cus- amidst the recession fears due to tor to create an adequate 'liquidity
todians. coronavirus. buffer' for debt schemes in order to
remain prepared for any crisis in fu-
Three main areas which may be dis- "The 44-player mutual fund industry is ture.
rupted have been highlighted by AMFI. not immune to the economic blowback
Firstly, disruption in customer services of COVID-19, and going ahead, small It has also asked mutual funds to par-
such as acceptance of physical forms. and mid-cap equity schemes will con- ticipate more in the voting process of
In regard to that, in a letter AMFI tinue to remain under pressure in the company resolutions while mentioning
stated that request from investors short to medium term on account of the current credit crisis that resulted
through their registered email IDs will volatility in the markets," said Krishna in returns of several debt mutual fund
be accepted. Karwa, Senior Research Analyst, at schemes.
iFAST Financial India.
AMFI also expressed concern that cus- He further said, "Investors should con- "There was a debate if the mutual fund
tomer services, such as, processing of tinue to focus on asset allocation and industry should be at par with banks
financial and non financial transac- having an SLR (statutory liquidity ratio)
continue with their investment and
tions, KYC, dispatching of physical and CRR (cash reserve ratio). Should
systematic investment plans (SIPs)."
cheques for redemptions and divi- mutual fund industry have an SLR at
dends, issue of monthly or half yearly "Despite witnessing a marked dip in all?" Sebi whole time member G

16 | 2020 | APRIL | BANKING FINANCE