Current Credit Risk fiasco can be traced back to Regulator when they recategorised #AccrualSchemes as #CreditRisk. That gave open mandate to FMs to take this risk.
It was up to #Advisors and #Investors to have got lured by higher yields with higher risks or not chased yields .
It was up to #Advisors and #Investors to have got lured by higher yields with higher risks or not chased yields .
This started when Regulator merged Institutional and Retail plans in the garb of protecting Retail Investors. Not realizing both segments have different risk appetite and knowledge levels
Ideally, they should have continued these two plans of institutional and retail (maybe same expense ratios) but different investment mandates to FMs.
Institutions are capable of understanding Risk-Reward and take informed investment/redemption decisions.
Retail investors depend on Advisors or they become DIRECT with very limited knowledge of Risk-Reward
Retail investors depend on Advisors or they become DIRECT with very limited knowledge of Risk-Reward
Requirements of both segments are different: retail investors need smoother journey, predictable returns, no risks (remember they have migrated from FDs), accruals more than capital gains/loss.
Just the opposite for Instititional/HNI Investors.
Just the opposite for Instititional/HNI Investors.
Regulator should reconsider bifurcating Institutional and Retail investors once again with clear guidelines to AMCs of their Risk profiles and investment mandates.
Also, ridiculously high limits under 20/25 rule of SEBI where one investor can have as much as 25% of scheme corpus needs to be relooked urgently.
Sector, Group Exposure and Individual security exposure guidelines needs to be more stringent
Sector, Group Exposure and Individual security exposure guidelines needs to be more stringent
