By IANS
Mumbai : C. Rangarajan, chairman, Economic Advisory Council to the Prime Minister, has sharply criticised the high tempo statutory warnings over the mutual fund advertisement appearing and disappearing in a flash and urged the fund managers to take them seriously.
Rangarajan did not miss the opportunity to make a pointed dig at the advertisements before the assembled fund managers for the Fifth ICRA Mutual Fund Awards, 2008, here late Tuesday evening.
“Information is a major concern. The rapid-fire manner in which the (statutory) warning is read ensures that the warning is effectively suppressed,” he said in his keynote address.
“Or take the indigestible information overload caused by multiplicity of products. While consumer choice and competition is a good thing, there has been such a proliferation of products that the retail investor be quite bewildered,” Rangarajan pointed out.
Illustrating his argument, Rangarajan said: “We have income funds, balanced funds, liquid funds, gilt funds, index funds, insurance linked funds, sectoral funds, assured return fund, close-ended funds and open-ended funds. There is a fund for every body with every conceivable need.”
“To complicate things further, a scheme may have sub-schemes with different plans and options. As a result, it is those funds that are aggressively distributed that carry the day,” he asserted.
Summing up, Rangajan said that while diversification and expansion of choice is a good thing, “much needs to be done in educating the investors and the information in this regard is a major concern.”