MFs wary of Sebi plan to link fees to how they perform

Sebi says this is for investors to make informed choices.

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management costs as the performance-based fees may not be earned,” said Jimmy Patel, managing director of Quantum Mutual Fund.

Patel said for such a model to work, AMCs would need robust investment processes, sufficient portfolio liquidity and clear benchmarks as monitoring performance for investors at large would depend on the ability to consistently generate alpha over the benchmark.

Fund houses are also uncertain about how the performance would be established.