Indian mutual fund industry is reaching new heights having recently crossed Rs 10 lakh crore assets under management (AUM) mark in the 50th year of its anniversary, but so are the risks related to the industry. As a part of its on-going efforts to enhance the knowledge on risk management, Dun & Bradstreet (D&B), the worlds leading provider of business information, knowledge and insight in association with Reliance Mutual Fund which is one of Indias leading mutual funds, organized a roundtable on Mutual Fund Risk Management, a first-of-its kind initiative in the mutual fund industry, in Mumbai today.
We along with Reliance Mutual Fund are starting our risk management series with a focus on risk management in the mutual fund industry. Our objective is to enlighten the concerned stake holders regarding risks related to the mutual fund industry. Apart from these discussions, we have been conducting capacity building initiatives and training on risk, expressed Ms. Preeta Misra, Director Learning Solutions, Dun & Bradstreet India.
Mutual fund investments are primarily exposed to market risk. They try to manage this by tracking various metrics and by taking measures such as hedging and diversification. However, for mutual funds, there is a lot more to market risks. During recent times, the mutual fund industry has undergone significant changes driven by regulatory initiatives: the regulator has put in place stricter controls /emphasis on sector-wise exposure for debt funds, proxy voting, mis-selling, distribution of mutual funds in cities beyond the top 15 locations, concentration around large investors and product labeling / colour coding to indicate the risk inherent in different MF schemes.
Given todays globally integrated and dynamic business environment, with changing business and compliance requirements, identifying, monitoring and managing risk is becoming more and more important for businesses, and more so, for firms in the financial services space, which tend to have multiple linkages with other parts of the economy and the world.
Other eminent speakers present at the Mutual Fund Risk Management Roundtable were Mr. Ananta Barua, Executive Director, The Securities and Exchange Board of India, Mr. Sundeep Sikka, Chairman AMFI and President & CEO Reliance Capital Asset Management Ltd., Mr. Amit Tripathi, CIO Fixed Income, Reliance Capital Asset Management Ltd. and Ms. Aparna Nirgude, SVP & Chief Risk Officer, SBI Funds Management Private Limited.
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