It’s been more than a month since mutual funds (MF) were made available on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
However, the size of transactions have been low till date. The average value of subscription at the NSE and BSE have been Rs11.03 lakh and Rs26.27 lakh, respectively.
The capital market regulator, the Securities and Exchange Board of India, allowed MFs to list on the stock exchanges through its November 2009 notification. While NSE started its MF platform on 30 November 2009, BSE followed suit soon after. Although at the time of going to press, schemes from a total of 12 fund houses are available at BSE and NSE each, investors have not yet really warmed up to the idea of buying and selling funds on the stock exchanges. In fact volumes have reduced in January compared with December. Of course against December, we are still one week short before January gets over.
“Traditionally funds are brought through independent financial advisers. Most of these advisors deal with fund houses directly and are not attached to brokers,” says Kunj Bansal, chief investment officer, Sanlam Investment Management India ltd, a South Africa-based asset management company that has got the capital market regulator’s in-principal approval (first level approval) to start its MF business in India.
However, fund houses are optimistic that the stock exchange channel would work in the long run. Saurabh Nanavati, chief executive officer, Religare Asset Management Co. Pvt. Ltd , says: “It will take time for volumes to increase, but steps are being taken to spread awareness. The exchanges are holding training sessions with brokers across India and fund houses are also accompanying them. More and more brokers are getting empanelled to be able to sell MFs on their terminals. I am sure volumes will increase manifold in future.”