Almost a decade after net heads first conjured up visions of businesses predominantly using the net to communicate with customers, the Indian internet-user population has become large enough for at least some businesses to actually try and do that. HDFC Mutual Fund recently decided to make the Internet the default option for at least some of its communications with investors. The net will obviously be cheaper and probably more convenient.
For starters, the fund will put up its quarterly newsletter on its website (www.hdfcfund.com) instead of dispatching printed copies to investors. In a similar vein, the fund's half-yearly disclosures will not be sent to investors when they have already been printed in a national and a regional newspaper. Of course, in either case physical copies will be sent to those investors who specifically ask for them.
Another change in the default option is that redemption and dividend payments will be directly credited to the bank accounts of investors if they have accounts with ABN Amro, Citibank, Deutsche Bank, HDFC, HSBC, ICICI, IDBI, Standard Chartered or UTI Bank, Here too, investors who like the feel of money in their hands can opt to have a cheque sent. HDFC of course is just through with digesting the erstwhile Zurich Mutual Fund. These measures will surely help it drive home the cost advantages it gains from its larger scale.
Also, HDFC will now charge a differential entry load for switches between its equity and balanced funds. This implies that if there is no differential between the loads, switchover will not cost anything to investor. Here the good news for investors is that out of the AMC's ten equity-based schemes, seven of them charge a 2 per cent entry load, the one balanced scheme charges 1.5 per cent and the Index fund does not charge any load.
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