Lower expense ratio for mutual funds by SEBI is a Welcome Step

There is welcome Development for mutual fund holders. Now maximum fee being capped at 2.25% and 2 %for big size funds. Until now mutual funds were charging very high fee from mutual fund holders. Let us hope ultimately this fee will capped at maximum 1%.This is known fact that returns from stock market are erratic and in long term in future mutual funds may give cagr returns of around 12 % or slightly more. So fee more than 1% is totally unjustified. Let us now welcome cap of 2% cost as of now. As far as noise being made by AMCs and distributors is concerned they have to be more efficient for long term health of mutual fund industry. For more and clear accurate information please go through various TV news or business news papers, as I am no expert.

 

The only problem I see is that there is still a vast population which is clueless about mutual funds and about how to invest in them.

If there are no distributors or agents to guide them, how will these invest in mutual funds. How will they decide which scheme is better than the other?

One solution is that the distributors/ agents start a fee-only advisory model. However, most people are reluctant to pay any sort of upfront fees.