Mutual Funds should be chosen according to financial goals and investment horizon.

Investing in mutual funds is a simple process. The various ways through which you can invest in mutual funds include:
• Direct investment by approaching the sales office of the fund house
• Investment through authorized agents and distributors
• Online investment through the website of the fund house or through distributor websites
• Investment through the stock exchange

The investor needs to mandatorily fill the below details in the Application forms.
• Name of the investor
• PAN No
• KYC
• Bank Details (Bank Name, Account No, Branch, City, MICR Code / IFSC Code)
• Demat Account details (if Demat mode is ticked)
• Date of Birth & Guardian details (if the applicant is minor)
• Mailing Address
• Signature

No. If the investment is done on behalf of the minor then Minor will be the sole and first holder without any joint holders in the folio.

Guardian in the folio on behalf of the minor should either be a natural guardian (i.e. father or mother) or a court appointed legal guardian.

An investor can register for email id & Mobile no in the folio to get instant transaction alerts from our end. Mobile No. and Email id is also compulsory for creating a Username for transacting online in MF Online.

No. The investor cannot add/remove the joint holders in an existing folio out of his own will.

No.

No, the investor cannot make the investment payment through Cash or using his Credit Card.

You get an “account statement” which is similar to a bank passbook. The account statement is a non-transferable document which shows details of all purchases and sales, along with the price at which the purchase or sale was made. It will also show the, amount invested and redeemed to date and the number of units held, helping you track your investments.

Unitholders cannot switch between schemes of different fund houses. The unit holder will need to redeem from one fund house and after credit of funds into the bank account, will have to invest in the other fund house scheme.

Yes, you can switch from growth option to dividend option in mutual funds. But when you switch from growth to dividend option or vice versa, it is treated as an exit or redemption from growth option of a scheme and purchase into the dividend option of the scheme or vice versa. Exit loads would be applicable accordingly.

Expense ratio is the annual fee that an investor is charged by the Asset Management Company for the management of their funds. It includes annual operating costs including management fees, allocation charges, advertising costs, etc. of the fund.

A Direct Plan is where you buy a mutual fund directly from the fund house or the AMC without the involvement of an agent or intermediary in the process of investing.

A regular Plan is where you invest in a mutual fund scheme with the help of an intermediary.

The only major difference between the two plans is that in a regular plan, you will have to incur higher expenses. Hence the returns earned on direct plans are eventually higher than the ones earned in regular plans.

MF Utility (MFU) https://www.mfuindia.com/is an innovative initiative of the Mutual Fund Industry which offers convenience and empowers the investors of Mutual Fund schemes. MFU facilitates the investors with a Common Account Number (CAN) which enables them to transact in multiple schemes of various Mutual Funds participating in MFU through a single transaction and consolidated payment.

Registrar or transfer agents are the trusts or institutions that register and maintain detailed records of the transactions of investors for the convenience of mutual fund houses.

Most of the mutual funds are serviced by two registrars which are Computer Age Management Services (CAMS) and Karvy.

You can get a consolidated account statement of all financial transactions made across all mutual funds and also other securities held in Demat mode if you have registered your e-mail address with mutual funds. You may request for electronic CAS of your holdings across all mutual funds to your registered email address at any time.

You can register for eCAS by registering at:

https://www.camsonline.com/InvestorServices/COL_ISAccountStatementCKF.aspx

Yes, you can take a loan against your mutual fund holdings in the form of an overdraft facility and interest is charged only on the amount availed as credit.

The amount given as loan will be lower than the market value of the units held by the borrower.

The loan can be availed via online or offline modes. A lien would be marked on the mutual fund units in favour of the bank or financial institution. Once lien is marked, the units cannot be sold or redeemed by the investor. For this investor needs to fill a form asking for marking of lien with all details of the mutual fund account like folio number, scheme, number of units, etc.

Since KYC is now mandatory for all the investments irrespective of the amount, the investor needs to submit the Change of Address details request to POS of CVL using KYC Details Change Form. Once the address details are updated at CVL, the same will be automatically updated in AMC database.

As per SEBI Third Party Transaction guidelines, you can carry out transactions from your mother’s bank account only if you are one of the holders in that bank account.

Equity, Debt and Hybrid Funds
Equity categories: Multi Cap Fund, Large Cap Fund, Large & Mid Cap Fund, Mid Cap Fund, Small Cap Fund, Dividend Yield Fund, Value Fund, Contra Fund, Focused Fund, Sectoral / Thematic Fund, ELSS.
Debt categories : Liquid Fund, Ultra Short Duration Fund, Low Duration Fund, Money Market Fund, Short Duration Fund, Medium Duration Fund, Medium to Long Duration Fund, Dynamic Bond, Corporate Bond Fund, Credit Risk Fund, Banking and PSU Fund, Gilt Fund, Gilt Fund with 10 year constant duration, Floater Fund.
Hybrid Funds :Conservative Hybrid Fund, Balanced Hybrid Fund, Aggressive Hybrid Fund, Dynamic Asset Allocation or Balanced Advantage, Arbitrage Fund, Equity Savings.

It Is an Equity Mutual Fund that qualifies for tax exemptions under section 80C of Income Tax act, which helps you save tax and also gives an opportunity to grow your money.

Can I put my money into ELSS scheme for tax benefit and withdraw the next year?
No. An investment under ELSS is locked for 3 years from the date of investments. Also keep in mind that ELSS is a type of Equity fund, hence investment time period should be for at least more than 7 years

The riskometer is a standardised tool used by mutual fund houses to communicate the risk associated with various mutual fund schemes. It depicts a visual representation of a fund’s risk profile that uses a needle (like that of a compass) to represent different risk levels.

Factsheet is a document that is published by all mutual fund houses for each scheme at the end of every month. Fact sheet has information about the scheme like investment objection, inception date of the scheme, AUM, NAV of the scheme, plans and options offered, risk profiling of the scheme. Fact sheet also provides the performance of the fund at various time periods compared to the benchmark and also year on year returns.

When the minor child turns major, one must follow the below steps for the mutual fund investments in the minor’s name.

Obtain or update a PAN for the minor who has now turned major

Open a bank account or update the existing bank account to major status

Complete the KYC procedure by filling KYC form and submitting identity and address proof as required

Submit application for change of status by filing up the Minor attaining Majority (MAM) form along with copy of PAN card, KYC application, cancelled cheque leaf with applicant’s name printed on it, nomination form and signature attestation by banker in the prescribed format.

No. With effect from January 1, 2011 KYC is mandatory for all classes of investors irrespective of investment amount.

An existing investor whose PAN is already updated in the mutual fund folio and wishes to invest again need not submit the PAN copy again.

No. As per latest guidelines, you need to first submit the KYC form and documents and become KYC compliant. Only then can you submit purchase application.

Yes. All the Joint Holders need to be mandatorily KYC Compliant.

Yes. The guardian of the minor investor need to be mandatorily KYC Compliant.

No. Nominee need not be KYC Compliant at the time of subscription of units. However, if the nominee wishes to claim the units on the death of the sole holder or all the surviving holders then he needs to submit KYC application form and get his KYC done.

Net Asset Value is the sum total of the current value of all the investments held in the portfolio after deducting expenses. The market value changes everyday and this is reflected in the Net Asset Value of the scheme. Net Asset Values are declared daily.To calculate the number of units an investor can purchase or redeem in a scheme, NAV is used as a number.

NAV is required to be disclosed by the mutual funds on a regular basis – on all business days or weekly – depending on the type of scheme.
The NAV is computed by dividing the fund’s net assets by the number of units outstanding on the validation date and is illustrated below:

Market value of the fund’s investment + Other current assets + Deposits – All Current Liabilities except Unit Capital, Reserves and Profit & Loss Account
________________________________________
No. of Units outstanding

Since the value of the various securities keep changing, the NAV also changes on a daily basis.
The NAVs are available on the websites of mutual funds.

In case the investor wishes to convert the units from the Physical mode into dematerialized mode & vice versa, then he needs to approach his Depository Participant and submit a request with his DP.

If the investor has the units held in the dematerialized mode and wishes to change of bank/address details then he needs to approach his Depository Participant and submit a request with his DP.

No.

Yes.

The NAV details can be obtained from the concerned AMC / Registrar. You can also view the NAV details of your Mutual Fund Units held in dematerialised form through IDeAS facility which facilitates you to view the latest balances with value and transactions that have taken place in your demat account in the last 30 days.

Yes, you can start an SIP in mutual funds held in demat mode.

No, you can not do STP or SWP in demat mode. Only SIP can be done.

Yes. You can transfer Mutual Fund Units from one demat account to another demat account (i.e., transfer between DPs of NSDL) or from demat account of one depository to demat account of another depository except for Mutual Fund Units which are under locked-in (say ELSS units).

You are requested to check with your Depository Participants (DPs) for the Rematerialization Request Form to convert mutual funds units held in demat mode to physical form.

No.

ETF’s or Exchange Traded Funds can be bought and sold like stocks on a regular basis.  When a person invests in ETF’s, they are investing in the set of underlying securities, which represent a particular index. ETF’s also has a net asset value or NAV that is determined at the end of each day.

No, you can not redeem fractional units in ETF.

No, SIP can not be done in ETF’s.

Tracking error is the difference between the particular mutual fund scheme’s returns and the benchmark returns. Higher the deviation from the benchmark returns, higher would be the tracking error of the scheme.

The constituents of the particular index may change sometimes. The fund manager however may take some time to replicate the change, hence leading to tracking error. Due to this, the NAV of different index funds could be different.

Yes, you can change your distributor by giving a request to the respective AMC for the same. It will take 7-10 working days for the change to effect the change.

You will have to first give a request for change of broker code from the existing broker code to direct.  Once this is done, you will have to change your investments to online folios (if they were purchased offline earlier). You can then check the procedure of the online platform and register accordingly.

You can change the transaction platform to myCams or MFU. myCams will allow you to transact in both regular and direct schemes but only of those mutual fund houses which are serviced by CAMS. MFU will allow you to transact in any scheme of any mutual fund.

There are many websites like moneycontrol.com where one can upload investment details and get a snapshot of scheme performance.

Investor can choose Standing Instructions / ECS mandate or give post dated cheques.

Common application form, KYC acknowledgment form, SIP registration cum mandate form, original cancelled cheque, if SIP through cheques, then the investor needs to submit 6 postdated cheques.
These documents needs to be submitted at official Point of Transaction acceptance centre.
If you are an existing investor, customer need not submit the KYC details, but all other previously mentioned documents needs to be submitted

Each mutual fund house has a set of dates for SIP like 7th, 10th, 15th etc. Investors can choose any date of the month from these options for SIP debit from the account.

Renewal form and ECS mandate for SIP should be given at least 30 working days prior to the last SIP date to ensure uninterrupted investment.

Units would not be allotted for that particular instalment in your mutual fund folio. The next SIP would again be scheduled and would go as per schedule.

You can skip out on a maximum of 3 consecutive installments of SIP without any risk of turning it inactive.

All you will have to face is charges by your bank for not maintaining sufficient funds in the account.

In case investor does not wish to nominate for a specific folio / account then he shall provide a declaration to that effect in the Common Application Form under Nomination Section wherein provision to that effect is already made.

Nominee can be a minor however guardian should sign the application on behalf of the minor nominee. Same guardian cannot be first / second folder for the same folio/ account.

Yes, it is mandatory for all the holders in a given folio to sign the registration/cancellation of Nominee even if the mode of holding is not Joint.

Three.

Unitholder being either parent or lawful guardian on behalf of a minor and an eligible institution, societies, bodies corporate, HUF, AoPs, BoIs and partnership firms shall have no right to make any nomination.

Resident Indian / NRI(Including Minor), Central Government, State Government, a local authority, any person designated by virtue of his office or a religious or charitable trust.

No.

Some of the risks involved in fixed income securities like bonds and debt mutual funds are interest rate risk, credit risk or default risk, reinvestment risk, etc.

No.

Units are redeemed on a first-In-first-out (FIFO) basis, i.e., the earliest units purchased would be considered for computing the capital gains and classifying gains as short term/long term.

For equity-oriented funds, capital gains for a holding period of more than one year are termed as long-term capital gains (LTCG). LTCG on equity funds would be calculated at 12.5% for gains exceeding Rs 1.25 lakh in a financial year.

For debt funds, long term capital gains are taxed as per your tax slab.

NRI investments in mutual funds are subject to TDS deduction, hence cannot claim TDS back. They may avoid double taxation on income by claiming tax relief in India has signed the Double Taxation Avoidance Treaty (DTAA) with the country of your residence. It is better to consult a tax advisor for specific tax advice.

Yes, in a switch the units are redeemed from one scheme and invested into another scheme. Hence even though amount does not get credited to bank account, for taxation purposes it would be considered as sale from one scheme and investment into another scheme. Hence LTCG or STCG would be applicable as per situation.

Dividends are taxed as per income tax slab under the head income from other sources.