5min chapter

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What Lies Behind Mutual Fund Expense Ratios: SEBI’s Call for Transparency in TERs

Capitalmind Podcast

CHAPTER

How to Charge a Performance Fee if You Beat an Index

Sebi said that the long awaited thing in Sandbox, let's now start figuring out how you can charge a performance fee if you beat some benchmark or something like that. We don't charge one in the PMS anyways. So to that extent, so far we are unbiased. I think because equity returns are bunched, you will get one year where you get 40% and then two, three years where you get seven or eight percent. This we found in the PMs is not very useful in long-only strategies. And even in their own data, they look at the funds and say, well, less than 50% have beaten the benchmark in their regular mode.

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