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There is a view that a close-ended mutual fund scheme is superior to the open-ended one. Do you agree?

Yamini Krishnamurthy, Hyderabad

I fully agree. I strongly feel that the fund managers resources and time should not be strained in managing a deluge of entries and exits day in and day out. Like in case of investment in equity, investment in mutual funds should also be facilitated only by easy exit through stock exchanges.

Besides putting lesser pressure on the fund managers, a close-ended scheme, where exit is possible only through the bourses, is also fair to the unit holders who prefer to stay put. A company issuing equity leaves it to the secondary market to take care of new entries and exits. This salutary and time-honoured principle should be embraced by the mutual fund industry too. Therefore, the concept of open-end schemes should be given the quietus.

S. MURLIDHARAN

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