Ch.10 · Risk Measures and Ratios · hard
What is 'soft closure' of a mutual fund scheme and why do AMCs implement it?
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EXPLANATION
Soft closure is when an AMC voluntarily restricts fresh lump sum investments (while typically allowing SIPs) once the scheme's AUM has grown to a size where additional inflows would dilute performance. This is most common in small and mid cap funds. It protects existing investors' returns at the cost of reduced fresh commission income for the AMC.
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