Sebi gives mutual funds a reality check

Guidelines on returns, classification and labelling will scale back 'outperformance' claims and improve transparency

The mutual fund industry has had a good run for quite some time. Fund collections, especially through systematic investment plans, have been to the tune of Rs 8,064 crore a month — an all-time high.
 
Amid this euphoria, however, the industry has also had to ride through the crisis that hit mid-and small-cap funds, defaults by Infrastructure Leasing & Financial Services and other companies, and of course, implement several guidelines of the Securities and Exchange Board of India (Sebi).
 
Sebi’s changes, which were proposed in October 2017 and notified last year, will have a long-term impact on equity