Edelweiss Asset Management CEO Radhika Gupta applauds SEBI’s consultation paper on ‘new asset class’ . ‘India finally…’

Market regulator SEBI's consultation paper which introduces the concept of a "new asset class" and proposes a structure for differentiated, higher-risk strategies, has caught the attention of the financial community.

Radhika Gupta, the CEO of Edelweiss Asset Management, took to social media platform X, formerly Twitter, to express her thoughts on the latest SEBI consultation paper, issued on July 16, 2024. 

In her tweet, Gupta outlined her optimism about the future of investment in India.

Here is what Gupta said 

"… SEBI consultation paper on ‘New Asset Class’ and creating a structure for differentiated, higher risk strategies looks very promising. A lot of details, but 3 things seem clear:

1. India is finally opening up to different investment products, styles and approaches. Passive, factor, inverse ETFs, alts and more. There is no single way to invest.

2. AMC businesses of the future will build multiple centres of expertise on a platform rather than a single style or individual-driven business

3. From a customer point of view, there is nothing like the convenience of the good old MF platform -- regulated, transparent, with great features like SIPs, and now getting increasingly open for innovation

Gupta’s tweet was accompanied by an image that outlined the current mutual fund structure and the proposed additional structure.

Existing and proposed structures

The image shared by Gupta provides a clear comparison between the existing mutual fund (MF) structure and the proposed additional structure.

Existing MF Structure:

Mutual Funds registered with SEBI and managed by an Asset Management Company (AMC).

The MF schemes are categorised into:

• Large Cap Fund
• Small Cap Fund
• Other MF Schemes
• Proposed Additional Structure:

Introduction of a New Asset Class also managed by an AMC.

This new asset class will encompass:

• Investment Strategy 1
• Investment Strategy 2
• Other Investment Strategies