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Message Icon Topic: The pitfalls of the load factor in a MF! Post Reply Post New Topic
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basant
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Quote basant Replybullet Posted: 20/Jul/2007 at 2:25pm
Good reason but what if we were to take a 3 year view QLTEF does not have that history but for other funds we could ride off the edges with that.
 
If I remember correctly last June Quantam was in cash because it had just raised money from its NFO so wasn't the outperformance more by design then default. We can keep arguing on this but the answer will emerge only when the markets tank 20% again. Will you go 40% cash at the peak?
 
If we cannot predict turns how can we account for the outperformance which came about by holding cash!!!
 
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deveshkayal
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Quote deveshkayal Replybullet Posted: 21/Jul/2007 at 12:18pm
We had discussed about Quantum here
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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Hitesh Shah
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Quote Hitesh Shah Replybullet Posted: 18/Jun/2009 at 9:27pm
How will this work?

The board considered the question of the existing manner of payment to the mutual fund advisors by investors and decided that there will be no entry load for any schemes. The investor will decide the commission that he is to pay to the distributor directly. It will not be deducted by the fund and then paid to the distributor. If the investor is making an application for Rs 100 that means the entire Rs 100 will get invested. There will be no deduction from that because there is no entry load. The board also decided that if the distributor is selling different schemes then he must disclose to the investor as to what commission he is getting for different schemes. This will avoid the conflict of interest and will allow investors to understand why a particular scheme is being recommended to them.


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Edited by Hitesh Shah - 18/Jun/2009 at 9:28pm
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Quote Hitesh Shah Replybullet Posted: 05/Sep/2009 at 12:53pm
So are we served or scr@w@d?

Various distributors are making their positions clear:

Shivkumar has posted elsewhere about HDFC Bank charging a flat Rs. 100 per quarter (plus taxes) on all investors holding MF's through HDFC Bank including those who invested before August 1, 2009.

Now, assuming we're talking equity funds and a load of 2.25% (which was the common entry load), a new investor has to invest more than Rs. 17,777 per annum just to "breakeven". An existing investor who has already paid the entry load but doesn't do any fresh investment is totally scr@w@d.

In other forums, there is mention of ICICI Direct's charges and a claim that Kotak Securities is not charging anything for the time being.

Citibank has sent round an obscure communication that indicates that they are charging per transaction. I say obscure because the charge structure is not mentioned. Customers are told to contact their RM's for details but the RM's are keen on pushing the latest NFO (from ICICI Prudential).

I wonder if SEBI knew how the system would respond to its dictat!
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