JioBlackRock regular plans explained: Higher costs, professional guidance | what investors get

JioBlackRock Asset Management, a venture between India's Jio Financial Services and BlackRock, said earlier this week that it will offer regular plans for eligible mutual fund schemes, allowing investors to buy them through registered distributors.

The fund house has so far offered only direct plans. Regular plans are sold through mutual fund distributors, whose commissions add to investors' costs.

For investors, the introduction of regular plans essentially adds another route to access JioBlackRock’s mutual funds—one that comes with distributor-led support.

In such a case, the distributor earns a commission from the fund house, which is included in the fund’s expense ratio. That means, investors indirectly pay for the distribution and advisory support. Direct plans do not include such a fee, and hence, the expense ratio is low

The difference may look small each year, but over a long period, even a small difference in annual costs can compound into a meaningful gap in returns.

Direct plans are a great option for investors who are comfortable selecting funds, tracking their portfolios and handling transactions on their own. A regular plan, meanwhile, is more suitable for first-time investors or those who prefer professional guidance when making investment decisions.

JioBlackRock expects to offer a full bouquet of mutual fund products over the next three years as the asset manager, after entering the specialised investment fund segment, prepares to expand into more SIFs, exchange-traded funds (ETFs) and offshore investment products through GIFT City

Jio Black Rock AMC Chief Investment Officer Rishi Kohli said the company plans to launch at least one more SIF in the equity long-short category within the next year, following the rollout of its maiden Prism Hybrid Long-Short fund.

It also expects to introduce its first ETFs in the coming months, while 10 outbound products have been shortlisted for GIFT City, several of which are awaiting regulatory approvals.

The Prism SI fund is a multi-strategy hybrid offering designed to generate annual returns of 9-11 per cent while capping fund-level risk at two per cent.

Kohli said the ₹ 10 lakh minimum investment threshold for SIFs places the product between traditional mutual funds and portfolio management services (PMS), creating what he described as a "missing middle" in the investment landscape.

Earlier this month Jio Financial Services and BlackRock launched the JioBlackRock Nifty 50 ETF, marking the joint venture's entry into India's fast-growing exchange-traded fund market.

The joint venture between Mukesh Ambani's Jio Financial Services and the world's largest asset manager has amassed about 180 billion rupees in assets under management in roughly a year since its launch by building a base in cash, debt-index and active equity funds.

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