Mutual Funds find India friendlier than China: Morningstar

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New Delhi | June 9, 2015 11:17 PM

Mutual funds find Indian market more investor friendly than China's although some of its practices are not at par with global standards...

mutual fund reliance mutual fundIndia is one of only a few countries in the report that continues to have capital controls, which limits investors’ ability to invest in foreign securities, the report said. (Thinkstock)

Mutual funds find Indian market more investor friendly than China’s although some of its practices are not at par with global standards, says a Morningstar report.

According to the Fund Investor Experience Report, of 25 countries, Korea and the US were named as the most investor- friendly markets while China was the least investor-friendly.

“With an overall grade of C+, India has a mix of outstanding practices and others that fail to meet global standards, relative to other markets evaluated in this report,” Morningstar, a provider of independent investment research said adding that the Indian fund market lacks any asset-based commissions.

From ‘A’ to ‘D+’, there are nine grades in the report.

Morningstar evaluated countries in four categories that are weighted to calculate the overall grade: Regulation and Taxation, Disclosure, Fees and Expenses, and Sales and Media.

In the Regulation and Taxation category, India receives a B- grade.

“India is one of only a few countries in the report that continues to have capital controls, which limits investors’ ability to invest in foreign securities,” the report said.

In the Disclosure category, India received a C+ grade.

India requires disclosure of full fund portfolio holdings monthly instead of on a semiannual basis typical of other markets evaluated in the report. India is one of only two countries that hold this distinction, the report said.

Korea received an A this year because of its improved sales practices, while the United States garnered the highest score for the fourth time.

The Netherlands and Taiwan got an A- grade, while United Kingdom got B+ and Sweden received B.

The countries that received B- ranking include Australia, Denmark, Finland, Norway and Switzerland.

India along with Canada, Germany, New Zealand and Thailand got a C+ rank, while Belgium, France, Hong Kong, Singapore, South Africa and Spain got C.

“China received the lowest grade of a D+ because of high fees, limitations on overseas investing, and restrictions on foreign-domiciled funds,” the report said.

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