Considering the ₹50 crore net worth limit set by SEBI for mutual funds, should I continue my SIPs in Quantum Long Term Equity? Will this limit impact the small investor in any way?
- A Kumar
Smaller fund houses are in no way riskier than larger funds. The minimum net worth criteria is put in place by SEBI more from a systemic perspective.
You may continue your SIP in Quantum Long Term Equity fund which is a five-star rated fund. In last five years, this fund has under performed its benchmark only once in 2013. Currently, its expenses are 1.25% which is 1.25 to 1.5 percent lower than other equity funds. This should lift your returns from this fund significantly over time. This fund has excellent performance and its low expenses further boosts the returns to its investors. Based on its fundamentals, Value Research considers it as the most investment-worthy fund in the category. Quantum AMC is a small fund house and at present has a net worth of ₹25.74 crore rupees. SEBI has increased the net worth requirement to ₹50 crores. It has given a three year time to the Asset Management Companies with lower net worth to raise it to the new prescribed limit. You need not panic in this situation as Quantum still has three years to reach the new limit.
This article was originally published on June 19, 2014.
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