12 months ago
Distributors Eye Asset Management via MF Lite
Some companies that help people invest in the stock market are planning to start their own investment funds.
This is because of a new rule called MF Lite.
This rule makes it easier for these companies to create funds that simply follow market trends.
Companies can then offer these new funds, which could mean more choices and lower costs for investors.
Investors are also preferring funds with lower fees.
For the investment companies, this can allow them to keep the entire income.
However, governance and compliance is a challenge, but the new regulations could add to the competition.
Leading mutual fund distributors are considering entering asset management.
They are using MF Lite regulations.
MF Lite is designed for passively managed schemes.
The regulation lowers entry barriers and promotes passive investing.
Distributors could launch Funds of Funds (FoFs).
- Who
- Leading Mutual Fund Distributors
- What
- Are considering entering asset management using MF Lite
- Where
- Not explicitly mentioned
- When
- Since March
- Why
- To evolve as asset managers and offer passive Funds of Funds.
Key facts
- Regulation
- MF Lite
- Focus
- Passively managed MF schemes
- Key Benefit
- Lowers entry barriers
- Minimum Net Worth
- ₹35 crore
- FoF Expense Ratio
- 1 to 2.25%
- Potential Entrants
- Prudent, Anand Rathi, Julius Baer, Standard Chartered, Scripbox, Geojit, Wealth India
- Date Published
- September 3, 2025
Quotes
Aditya Agarwal
Co-founder and CEO of Wealthy, a wealth tech platform for MF distributors and wealth managers
“The MF Lite regulation creates a perfect entry point for established distributors to evolve as asset managers without abandoning the open architecture model that their clients value.”
thehindubusinessline.com
“Since passive funds simply track indices, MFDs can offer their own products alongside others without compromising their advisory integrity.”
thehindubusinessline.com
Sunil Subramaniam
Director of independent think-tank Sense and Simplicity
“investors are increasingly preferring passive funds where the expense ratios are lower than actively managed funds.”
thehindubusinessline.com
“By launching MF Lite AMCs, MFDs can keep the entire income stream to themselves, but only large distributors will attempt this as they have to achieve scale for long-term sustainability”
thehindubusinessline.com
Jignesh Madhwani
Founder and Director of Torin Wealth Management
“MF Lite can be a game-changer allowing large distributors with scale and research depth to evolve as a mini-AMCs by launching FoFs which offer investors curated baskets of funds across AMCs under one umbrella.”
thehindubusinessline.com
Sources
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