Mukesh Ambani-controlled Jio BlackRock to shake up sector by...

With an attempt to focus on small investments and bypass the distributors to reduce costs, Jio BlackRock Asset Management will launch about a dozen equity and debt funds in India this year, reports Reuters. The joint venture between the Mukesh Ambani-owned  Jio Financial Services and BlackRock is set to shake up the sector by leveraging its large digital network to bypass traditional distributors. Jio BlackRock has already applied to the market regulator to launch eight funds. It launched three funds last month. It will be good for small investors as it will allow for investments as low as Rs 500.

Jio BlackRock Asset Management announced Monday that it has raised more than $2.1 billion across three debt mutual fund schemes. It also said that as many as 90 institutional investors and 67,000 retail investors have invested in these funds. At present, active funds offered through distribution on average have a total expense ratio of about 1.78%. They can charge a maximum of 2.5% of the investment amount. Direct funds generally reduce costs by 0.5% to 0.6%.

Jio BlackRock intends to bypass the dominant channel of distributors, offering funds directly to institutional and retail investors, the sources said. That will reduce the fee or expense ratios associated with the funds, they said. The joint venture between Jio Financial Services, and BlackRock, entered India’s Rs 72.2 trillion or $844 billion funds market last month. Earlier, Ambani’s Reliance Jio caused severe market disruption with its pricing and reach. Jio, India’s largest telecom carrier by subscriber count, launched in 2016, became the largest by offering mobile phones and voice and data packages at well below prices prevailing in the industry. Jio has 475 million subscribers.

(With inputs from Reuters.)