Nowadays, I see lot of advertisements of Infotech funds. Do you advise to invest in them?
As an investor you need to exercise caution in two areas : • Most funds while advertising tend to annualize their monthly returns which is arithmetically correct but technically wrong because usually such returns are not sustainable. • The fund must have a sound strategy for analyzing and investing in infotech companies TOP What are the broad guidelines issued for a MF? SEBI is the regulatory authority of MFs. SEBI has the following broad guidelines pertaining to mutual funds : • MFs should be formed as a Trust under Indian Trust Act and should be operated by Asset Management Companies (AMCs). • MFs need to set up a Board of Trustees and Trustee Companies. They should also have their Board of Directors. • The net worth of the AMCs should be at least Rs.5 crore. • AMCs and Trustees of a MF should be two separate and distinct legal entities. • The AMC or any of its companies cannot act as managers for any other fund. • AMCs have to get the approval of SEBI for its Articles and Memorandum
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- Nowadays, I see lot of advertisements of Infotech funds. Do you advise to invest in them?
