India’s worst fund houses and the importance of benchmarks
Last week, Securities and Exchange Board of India (Sebi) chairman U.K. Sinha, speaking at the Confederation of Indian Industry Mutual Fund Summit, said something that took many of us by surprise. It is not often that a capital markets regulator speaks about the performance of products, the lack of it and how the regulator was going to deal with it. Regulators largely stay with removing systemic risk and the risk of fraud, leaving investors to deal with market risk on their own. Why would Sinha, then, point to nine fund houses that were beaten by their own benchmarks over the last three years and promise to take this up with the companies? Is this the start of micro-managed regulation?