Ch.10 · Benchmarks and Performance Evaluation · medium

What is 'regulatory risk' in mutual fund investments?

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EXPLANATION

Regulatory risk is the risk of adverse changes in laws, regulations, or government policies affecting investment values. Examples include: changes in LTCG tax rates on equity (as happened in 2018), sector-specific regulatory changes (pharma pricing controls, banking regulations), or tax treatment changes for debt funds (2023 indexation removal).

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