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Sunday, February 11, 2001













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Amfiindia.com -- Many information gaps


Aarati Krishnan

AFTER the tech stock boom and the phenomenal returns from some mutual funds last year, no serious investor would be unfamiliar with mutual funds. But not many may have a thorough understanding of the nitty-gritties of mutual fund investing, the distinction between the various products on offer and the regulations governing mutual funds.

If you are looking for this kind of information, there are not too many online resources in the Indian context. Websites of prominent mutual funds, no doubt, have a module on the concept of mutual fund investing. But this information is by no means a comprehensive online resource on mutual funds.

The best place for such information, one would think, would be the website of the Association of Mutual Funds of India (AMFI), the self-regulatory body for mutual funds in India. The best role model for AMFI would be the website of Investment Company Institute (www.ici.org), the self-regulatory organisation for mutual funds in the US, which is a comprehensive database for anybody seeking information on the American mutual fund industry. But the AMFI website (amfiindia.com), certainly has a long way to go before it evolves into a one-stop-shop for those seeking complete information on Indian mutual funds.

What the site has

At present, the site features eight modules that could be of some use to a prospective mutual fund investor. The modules offering general information are: Mutual fund concepts, mutual fund industry, net asset values, regulations. Four other modules put out the regular publications by AMFI -- AMFI Monthly, AMFI Press Release, AMFI Publications and AMFI Updates.

Centralised NAV information

Of these, net asset value and AMFI Monthly, are probably the two most useful pieces of information on the web site for the lay investor. The NAV module has been recently modified, with a more investor-friendly format. This is a good place to download up-to-date information on the NAVs, and the repurchase and sale prices of all the mutual funds that are members of AMFI. This module of the site is promptly updated by the funds daily. The module classifies funds both according to type and objective for easy reference.

Other statistics

The AMFI Monthly is a document that sums up the total fund inflows, outflows and residual net assets for Indian mutual funds during a particular month. Though this data may not mean much to a layman, the trends in fund flows could provide important pointers to the state of investor confidence in the industry.

The AMFI Updates are quarterly publications from AMFI that detail the regulatory changes in that quarter, status of implementation of previous measures, changes in fund flows and trends in mutual fund investing.

Missing elements

Investor education: The website is woefully short on general information about mutual funds for the uninitiated. Though the site has dedicated modules which seek to explain mutual fund concepts and regulations, what is available in these modules is at best sketchy.

The section on mutual fund concepts runs to just a page and stops with brief definitions of common terms such as repurchase price, NAV and load. The section could certainly do with a more elaborate description of the concept of mutual fund investing, types of funds, mutual fund expenses, the common risks involved in investing in equity and debt funds and so on.

The parallel section on the ICI website, for instance, features elaborate modules on mutual funds, mutual fund shareholders, issues in mutual fund regulation, retirement security issues, and so on. There is also a fund industry factbook, which gives comprehensive statistics on the different classes of mutual funds in the US.

The section on Regulations is even more inadequate and just re-directs the user to the SEBI website where mutual fund regulations are detailed. The SEBI website is undoubtedly the most authentic source of information on regulations governing the industry. But AMFI could serve user interests better if it demystified the SEBI's regulations for the layman. A reclassification of the regulations and a brief explanation of each regulation and its implications, shorn of legalese, would probably be the best way to present this information.

Links to other MF resources

As a nodal point for investors interested in mutual fund investing, this site could also do with deep links to websites of all the Indian mutual fund houses, rating agencies, registrars and personal finance portals which offer information on mutual funds. This would enable an investor interested in ferreting out more information to link directly to the fund house of his choice without the circuitous process of going through a search engine.

In its brief period of existence, AMFI has undertaken several initiatives to improve disclosure and valuation standards in Indian mutual funds. But as the representative body for Indian mutual funds, it also has an important role to play in investor education. Given the ease of information dissemination on the Net, Amfiindia.com would probably be the best place for AMFI to get a headstart on this endeavour.


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