I wanted to know the reasons of not having an option of a mutual fund that does only derivatives?
Any particular laws that don’t allow such a risky fund?
With derivatives there is a chance of losing full capital, especially if one is not using investing/trading stocks in conjunction (as the main component). The general public may not be ready for such exposure…
Curious, why would u want a mutual fund that trades only in derivatives.
If you want a fund to deal only in derivatives, it means you have a bigger risk-appetite and an even bigger capital.
And we have AIFs for that (Category III AIFs) which can deal in derivatives.
I believe the newly introduced SIFs too, allow investments in derivatives for speculation rather than as a hedge.
So, the reason is pretty simple, Mutual Funds are meant for retail investors as a tool for investment; who just want to preserve their capital and generate decent returns that can beat the inflation at the least.