![investor](https://img.etimg.com/thumb/msid-111816484,width-300,height-225,imgsize-23060,resizemode-75/investor.jpg)
There can be little to disagree with the notion that Indian investors need a bigger investment buffet menu so long as the higher associated risks are managed professionally. The question arises whether MFs are better placed to do so than PMS and AIF providers. Sebi's preference for established track record weighs the scales in favour of the mutual fund industry - although the playing field may need to be levelled progressively for PMS and AIF players. Since the matter is related to creation of wealth, initial cannibalisation upwards into the bigger-bracket PMS and AIF segments will be the more acceptable solution for a regulator. It also helps to contain risks towards the top of the funnel while arresting its spread to the bottom where adverse outcomes can have an outsized impact on household savings.
An asset class offering higher returns can nudge more household savings into the capital markets and reduce intermediation by banks. This is the direction India must follow for financial evolution that lowers the cost of capital. Scope for creativity in designing thematic investment options makes Sebi's suggestion for a new asset class a compelling one.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.