If you invest in mutual funds, then this news is very important for you. Because SEBI has issued new rules regarding this. These rules will come into effect from 1 July 2021.
Taking care of the interest of the stock market and mutual fund investors, the market regulator SEBI (SEBI-Securities and Exchange Board of India) frequently issues new rules. Similarly, on Wednesday, SEBI has issued new guidelines. According to the new circular, MMC i.e. Asset Management Companies (mutual fund houses which run schemes) will now have to pay 20% of their fund managers’ salaries in units of the same scheme. Of which he is the fund manager. Apart from the fund managers, the salary of all the employees of the fund house will be paid in this way. These new rules will come into effect from 1 July 2021.
Let’s first know why SEBI did this?
Experts say that SEBI has taken this decision. So that the fund managers who have the money should manage it with full responsibility. Because in the past, Franklin Templeton Mutual Fund suddenly decided to discontinue its schemes. 26,000 crore rupees of investors were trapped by this decision. That is why SEBI wants that the fund managers and staff should also be responsible for the schemes you are giving to the people.
How will this affect investors
This decision is very good for the investors. Because, in such a situation, the funds of the fund managers would be invested in those schemes. So the performance of the schemes can be improved. In such a situation, the expectation of getting more investors will increase.
Now let us know what is the job of fund managers?
The fund manager has to manage the mutual fund. If you put it in simple words, then you manage the schemes that you have invested (at one time or through SIP). They choose shares with good research.
According to the scheme of the fund, buy and sell securities. Suppose the money is invested in the banking scheme, then the fund managers buy and sell good banking shares.
In this, their study experience and understanding is useful. These people help to increase the amount of investors gradually.
What other functions do fund managers have?
The fund manager manages the mutual fund. Provides all the necessary regulatory requirements related to the fund. It works according to SEBI regulations. Fund managers are also responsible for protecting the investors’ capital. It is also the responsibility of the fund manager to review the movement of the fund.
How do fund managers benefit an investor?
The fund manager ensures that the investors keep getting good returns from the fund. The fund manager is also responsible for making the wrong decisions. The fund manager takes the help of his team to review the investment. Trying to get higher returns by breaking the benchmark of its own fund. Suppose last year we got a return of 15 per cent, then the next year it would be 20 per cent. Also, the returns of the benchmark index ie Sensex-Nifty, Midcap and Smallcap are compared with the returns of the fund.
What to do if the fund manager changes?
If your fund is giving good returns and suddenly the manager changes, then put the fund in the watch list. His returns should be closely monitored. If the Star Fund Manager goes, then keep an eye on the fund. Experts say that if the fund’s performance is weakening after the departure of the fund manager, then you can think of withdrawing from the fund.
Know what is a mutual fund unit…
If you put it in simple words, you invest 10 thousand rupees in a scheme of mutual fund. Its NAV is 100 rupees. In this case you will get 100 units. How 10,000 divided by 100 gives you 100. 10,000 / 100 = 100. You get these units by investing in the scheme. These units have the most importance in horse trading.
Now suppose that in a year the NAV rises from Rs 100 to Rs 200 and you decide to sell it.
What will happen then? Now you will get 20,000 rupees. Multiplying 100 units by 200 rupees will make this amount. 100 * 200 = 20,000 rupees.
