Yup, that’s right!
Honestly, I have no idea. HDFCAMC especially seems like it’s at a decent valuation right now, but it’s difficult to really predict how it’s going to be doing from a profit growth point of view. Because, after all, any money that one uses here is not being used elsewhere, and there might be better growth opportunities in other areas. Personally, I already own HDFC and ICICI both individually and as part of the index, so I’m not bothered about owning either subsidiary separately.
I’m not aware of the nuances of how AMCs in the US are regulated, but from the little reading I did as part of this write-up, I think the regulations are largely similar. Market forces and economies of scale really cut costs there, so the regulator doesn’t need to meddle too much with expense ratios. There are also a lot of random funds that are allowed to exist there (ARK, for instance) which increases risk for the end-investor but is ultimately in the spirit of the market. All in all, like everything else, SEBI does control the AMC industry quite closely in India. Which reduces the risk for the end investor (saving them from extreme loss and dropping off from the market entirely) but at the same time reducing potential for reward (for both investors and AMCs).
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