Sebi proposes new high-risk MFs for wealthy investors

The Securities and Exchange Board of India (Sebi) has sought inputs from members of the Association of Mutual Funds in India (Amfi) on a proposed new mutual fund category targeted at wealthy investors with high-risk appetite, two people familiar with the development said.

- Neil Borate, Sashind Ningthoukhongjam

The proposed category will have more relaxed investment norms than mutual funds to help affluent investors generate high returns, the people said on condition of anonymity.

"Such funds may invest in junk bonds or pursue long-short strategies," one of the two people said.

High-risk investment strategies are currently offered through portfolio management services (PMS) with a minimum investment of ₹50 lakh. The markets regulator has proposed a new category of mutual funds with a lower investment threshold than that of PMS but higher than typical mutual funds, according to a letter from Amfi to its member asset managers.