Fund managers: Little skin in the game( 13:00, 24-Aug-16)
Outlook Asia Capital compiled data that suggests top 30 equity schemes comprising about 60 per cent of mutual fund sector's equity assets
"This is contrary to the practice followed by all successful global fund managers in developed countries," said Manoj Nagpal, chief executive, Outlook Asia Capital.
To be sure, no rule dictates fund managers and employees to invest in own fund house's scheme(s). Earlier this year, the markets regulator had said that all fund houses need to disclose aggregate investment in schemes, which includes investments made by board of directors, fund managers, and key employees.
Investing in one's own fund can inspire confidence among ordinary investors. Also, a fund manager is less likely to take rash investment decisions if he has his own money in the scheme, say experts.
Notably, in July 2015, Kotak AMC had asked its employees to sign a voluntary pledge to invest only in Kotak MF schemes.
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