Thursday, March 17, 2016

How to read a mutual fund statement?

1. What does a mutual fund statement contain? 
Whenever you make an investment in a mutual fund scheme, the fund house has to send you an account statement providing details of your holding. You can opt for a physical copy or a soft copy which can also be accessed online.

This statement gives details about the transactions conducted by you within a defined period. It is sent within a period of 3-5 working days after the transaction. The statement also indicates any changes in the account whenever there is a redemption, additional investment, dividend declaration or a change such as KYC details. Each folio created has a different account statement.

2. Should you preserve your MF statement? 
It is not necessary to preserve a physical copy of a statement from a mutual fund house. An investor's ownership is recorded by the AMC in its records. To redeem your units, or to purchase more units, you need to only mention the folio number, scheme name and fill the relevant form.

3. What details does a mutual fund statement have? 
Investors' personal details and bank details: Your name, address, e-mail ID and contact numbers of the investor or joint investors, if any, are mentioned in this section. Ensure that the details mentioned in the account statement are correct. Ensure that the name of the bank and account number is correct else you will face problems when you were to redeem your mutual fund units. 
Folio number: Each time you make an additional investment in a mutual fund ensure that the folio number is the same as the previous one. Use the same folio number to invest in any fund be it debt, equity or a tax plan, with the same fund house. Using a single folio makes it easier to track all investments with a particular fund house. 
Current cost and value: The current value is the latest market value of the investments on the date the statement is generated while the current cost indicates the amount invested in the scheme. The number of units allotted is calculated using the amount invested divided by the NAV of the scheme as on the date of allotment. Any exit load, would be deducted from the NAV and the proceeds paid out to the investor. 
Advisor's name, EUIN and PAN details: If you have invested through an agent, his name and code and EUIN number will appear in the account statement. Ensure that the PAN mentioned in the account statement is correct. 
Transaction summary: This section mentions the types of transactions that you have opted for, which might include purchase, the systematic investment plan ( SIP) or the systematic withdrawal plan (SWP). Besides, other transactions are also mentioned, along with the percentage or rupees per unit at which the dividend is reinvested or paid out.

Sunil Lalge
Wealth Creating Services

No comments:

Post a Comment