Jio MF arm opts for aggressive expense ratio in its maiden active scheme

Mumbai, Sep 23 (PTI) Jio Financial Services' mutual fund arm on Tuesday spelt out an aggressive pricing strategy with its maiden active fund scheme.

The Jioblackrock Flexi Cap Fund has a total expense ratio of 0.50 per cent, making it one of the lowest pricing in the category.

Jioblackrock Asset Management, an equal joint venture between the Reliance Industries-promoted company and global asset manager BlackRock, is a challenger entity in the already crowded MF space which has over 40 entities.

Earlier, Reliance Industries adopted an aggressive pricing play to launch its products, with Jio Infocomm's offerings the most revolutionary ones, which also led to troubles in the telecom space.

The entity's managing director and chief executive Sid Swaminathan said the AMC may look for similar pricing strategies in the future offerings as well, and added that it is happy to pass on the benefits of lower costs through strategies like technology use and direct selling to the investors through lower expense ratios.

"..if we are able to scale, if we are able to leverage our technological tool, our investment style to be able to manufacture the fund in a much more cost-effective manner, then we are keen that we are able to pass on some of those cost benefits to the end customer. That's the principle that we're going to be applying," the CEO said.

Additionally, the scheme does not have an exit load either, but the CEO hinted that the same will not be the case always.

Apart from the lower total expense ratio (TER), the flex cap scene will be powered by BlackRock's 40-year-old 'Systematic Active Equities' platform, which uses big data, analytics and human expertise to deliver better returns over the long term.

The newest fund by the JV, which has eight funds, including index funds, will be benchmarked against the NSE-500 index. The new fund offer is open till October 7.

The AMC's chief investment officer Rishi Kohli said a bulk of the portfolio will be invested in large cap stocks because of the benchmark that it is tracking. PTI AA MR MR