Mutual funds and Profits


An interesting statement in this article got my attention.

Mr A. Balasubramanian, CEO of Birla Sun Life Mutual Fund, explains that an AMC’s profitability is a function of asset size, mix of assets, employee productivity and costs and that the AMC improved on all these parameters last year.

There is no mention of “performance of the fund” when it comes to profits. A mutual fund makes money as long as they have assets under management irrespective of whether the assets generate returns or not.

This is another interesting interview.

And yeah, I just came to know that my dad had  bought a Religare ULIP  last year and they deduct just 28% of the premiums every month as commissions. The bitter fact is if you cancel the ULIP, you lose a whole lot more.


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