Many investors are wondering if SEBI’s new performance-linked mutual fund fee structure will actually work in their favour. The idea sounds fair, fund managers earn more only when they deliver better returns but will it really make investing cheaper or more transparent?
How will SEBI decide what “good performance” means?
Could this push fund managers to take bigger risks just to earn higher fees?
And what happens when the market underperforms. will investors still end up paying more?
It’s a genuine concern for anyone investing through mutual funds right now is this rule truly in investors’ best interest, or just another complicated change in the system?
SEBI’s idea of performance-linked mutual fund fees sounds fair fund houses should earn more only when they deliver better returns. It’s meant to protect investors and make fund managers more responsible.
What if the market is down and even the best funds can’t beat benchmarks?
And if managers chase higher returns just to earn more, that could lead to unnecessary risks for investors.
The idea is good, but the execution will be tricky. SEBI will have to make the rules super clear,how the fees are calculated, when they’re charged, and what benchmarks are used. Without that, small investors could get more confused than helped.
For now, it’s best to stick with your SIPs, choose transparent mutual funds, and keep an eye on the total expense ratio (TER) that’s what really impacts your long-term returns, not how fancy the fee model sounds
