An AMC runs 38 schemes; 11 have under Rs 200 crore of AUM and 6 of those overlap heavily with a larger sibling. Recommend which to merge, close or promote, and what each choice costs investors and the AMC.

Merge the six overlapping schemes and the small MNC fund into their closest siblings, promote the multi asset fund and the international fund of funds, and keep consumption and infrastructure on a three-year review. Merging the six saves their investors about Rs 3.28 crore a year in fees and saves the AMC about Rs 8.4 crore of fixed cost, net of lost fees about Rs 5.12 crore. Mergers beat closures because they are generally tax neutral for investors.

A restaurant with eighty dishes on the menu cooks most of them badly, because the kitchen's attention is spread thin and slow sellers go stale. Sub-scale schemes that copy a larger sibling cost investors in fees and the AMC in attention, and give investors nothing the sibling does not. The six overlapping schemes average about Rs 137 crore each. At about 1.0% of AUM kept by the AMC after distributor payouts, they earn Rs 8.2 crore a year against Rs 8.4 crore of fixed cost: they lose money and absorb a manager's time.

For investors in the six schemes, moving to siblings charging 1.80% instead of 2.20% saves 0.40% a year on Rs 820 crore, about Rs 3.28 crore a year. For the AMC, that same fee saving is lost revenue, but six schemes' fixed costs of Rs 8.4 crore go away. Net, the AMC gains about Rs 5.12 crore a year while investors pay less, which is the rare change where both sides win. The cost is one-off: a merger changes a scheme's fundamental attributes, so investors must be offered an exit without load; if 15% leave, the AMC loses about Rs 123 crore of AUM. Confirm the current SEBI process for mergers and fundamental attribute changes.

Judge them on whether they give investors something the range lacks. The multi asset fund and the international fund of funds fill real gaps and are cheap to run, so they are the ones to promote with distribution effort. Consumption and infrastructure are distinct themes but cyclical; keep them, with a three-year review against their benchmarks. The MNC fund at Rs 70 crore has neither scale nor a clear role; merging it into the flexi cap fund, even with modest overlap, serves its investors better than closing it, because a closure is a taxable redemption.

Handle the two lock-in schemes with care. Retirement and children's plans carry lock-ins investors chose deliberately, so they should merge only into a scheme with the same lock-in and purpose, or wait. The final recommendation should be a sequence, not a list: announce the six mergers in one cycle so distributors explain them once, then relaunch the two promoted funds with their new role.