Lim­i­ta­tions

Consumer Voice - - Bfsi -

It is not very pop­u­lar among bro­kers and fund ad­vi­sors be­cause the rate of bro­ker­age/com­mis­sion paid to them is lower than in other in­vest­ment prod­ucts. There­fore, first-time in­vestors do not get to know about this fund op­tion, a fac­tor that is lim­it­ing its growth. Due to the mod­est rate of re­turn (as com­pared to other MFs), this type of fund has very few large

in­vestors in the mar­ket. This fund does not have the ‘sys­tem­atic in­vest­ment plan’ (SIP) tag as it is a liq­uid fund and does not in­sist on a min­i­mum pe­riod of in­vest­ment. Hence, any in­vestor can exit at any time and get re­turns for the pe­riod of hold­ing. This holds backs growth as well as pos­si­ble higher re­turns. This also dis­cour­ages those who are in­vest­ing for ‘sav­ing’ pur­poses. There is a per­cep­ti­ble hes­i­tancy in the in­vestors’ mind be­cause of the ‘ min­i­mum in­vest­ment’ rider, which also acts a damp­ener while tak­ing in­vest­ment de­ci­sions. Some feel that the min­i­mum in­vest­ment could be fur­ther brought down to Rs 1,000 to en­able widen­ing of the net to at­tract small retail in­vestors.

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