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The Last Decade in Rear-View

The landscape of mutual funds has changed considerably in the last ten years and Mutual Fund Insight is proud to have provided its readers the best possible account of it...

The last ten years have had their ups and downs, but the knowledgeable and self-driven investors who make up Value Research's audience are much better off than when they started off.

Ten years have gone by - a rather large chunk of anyone's working life. As I write the First Page of Mutual Fund Insight for the 120th time, I find myself suspended between two alternate states, rather like Schrödinger's cat. Did this last decade go past in a flash, as if this magazine was launched just yesterday? Or has it been a long time, in which so much has changed that it's hard to find much that's the same?

As with the cat, reality is a superposition of both states. What has changed is important but what hasn't is absolutely crucial. Here's the crucial, unchanging part: if someone were to ask me to quickly lay down the ideal mutual fund investment strategy, I will say today exactly what I said a decade ago, "For long-term savings, invest regularly through SIPs, in a small number of diversified equity or balanced funds that have a good track record." And I'm pretty sure that this is exactly what I will be saying on Mutual Fund Insight's 20th anniversary too.

This remains true regardless of the hundreds of funds of a dozen or more type that have been launched, and regardless of the waves of booms and busts that we have seen in the years gone by, including the biggest global financial crisis in many decades.

However, even though the fundamentals of fund investing have not changed, the environment within which people save and invest has changed radically. A big part of the change has been the regulations that govern the operations of mutual fund companies and the distributors who interface between the funds and investors. Many, if not most, of these changes have been for the good and we at Value Research are proud to have first highlighted the problems that these regulatory changes have tackled.

One of the most impactful changes during this decade has been the clean-up in new fund offers. AMCs now have to pay for the issue expenses out of their own pocket instead of charging them to the fund's NAV as used to happen earlier. This, along with Sebi's crackdown on frivolous NFOs has seen the end of the flood of new issues that were intensively hyped. However, the wheels of regulatory change do grind rather slowly. Sebi could have arguably been quicker to deal with these malpractices.

But the biggest and the most controversial change in the investing environment has been the elimination of entry loads. On one hand, the end of entry loads has sharply reduced the incentives for mis-selling. On the other hand, it has led to a more difficult business environment for many distributors and AMCs. Sebi has now instituted a fresh wave of changes in order to encourage the spread of mutual funds and it remains to be seen how well they work out.

All this notwithstanding, I feel that the best outcome has been for the knowledgeable and self-driven investor, that is, the kind of investors who reads this magazine and who uses valueresearchonline.com. The breadth of information and analysis available to you has grown tremendously. Value Research itself is a much bigger organisation than it was a decade ago and we are able to serve you much more comprehensively than we could earlier.

Investors haven't had a great time over the past three to four years. Here's hoping that'll change and in October 2022, the 240th First Page sees us all looking back at a wonderful decade of great growth in our investments.