Mutual Fund Related

How can I invest?

Investing in mutual funds is fairly simple. Below are the four main ways of investing.

  • 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

What should I be aware of at the time of investing?

Before you invest in a mutual fund, you must check the minimum investment amount, the scheme’s expense ratio (the higher the expense ratio, the more costly it is to invest in the scheme), the scheme’s investment objective, the scheme’s past performance, etc. It is important that you spend some time understanding these elements before investing.

To guide you with your investments in mutual funds and help you make informed decisions, you should consult a professional financial advisor who can provide you with advice suitable to your circumstances.

What is a mutual fund’s NAV and how is it calculated?

When you invest in a mutual fund, you will receive units at the current NAV (NAV stands for Net Asset Value).

Simply put, NAV is the price of a single unit of the fund. An investor can buy or sell units at this price. NAV of a fund changes every day as a result of changes in the market price of the securities held by the fund. Here’s an example to help you understand NAV. Let’s assume a fund’s current NAV is Rs. 20 per unit. Now if you want to invest Rs.10, 000 in the fund, you will end up buying 500 units (Rs. 10,000 divided by Rs. 20)

NAVs are calculated by taking the closing value of all securities held by a fund. From this value, its liabilities and expenses are reduced before declaring the NAV to the public The Securities Exchange Board of India (SEBI) which is the capital markets (including mutual funds) regulator has stipulated the following formula for NAV:

NAV = (Value of Assets-Value of Liabilities)/Number of units outstanding

The NAV for mutual fund products is calculated at the end of each day for every fund. It is published on the website of every fund house and that of the Association of Mutual Funds in India (AMFI).

What do I get as proof of my holdings?

You will receive a Statement of Account (SOA) for your investment which will contain the details of your investment along with the address and contact details.

What is the frequency for dispatching the account statement?

Consolidated Account Statement (CAS)/Account statement is dispatched monthly, on or before 10 calendar days of the following month for folios which have been transacted in the previous month.

Incase valid email id is available, the account statement will be emailed to the investor within T+5 business days (T being date of Transaction accepted before cut-off time)

Note: Account statement will be sent only for financial transactions like purchase including NFOs, redemption including maturity, switches, systematic transactions like SIP, SWP, STP etc. dividend payouts or reinvestments, merger, etc.

What if there are no transactions in a folio for a long period?

CAS for folios that do not have a financial transaction in a half-year period ending September or March will be sent in the month following the half-year period, with details of the holding at the end of six months.

What is Consolidated Account Statement (CAS)?

Consolidated Account Statement or CAS is an account statement where the Registrar and Transfer agents identify common investors across fund houses by their permanent account number. The following parameter will be considered -

a) Financial transactions in a month

b) Identical holders

c) All unit holders are KYC compliant

What are the different modes through which an investor can request a Statement of Account?

1) Contact Centre: The investor may call our customer-care helpline at 1800-266-9603 and request an account statement through Interactive Voice Response (IVR). If the email id is available, the account statement will be emailed within 30 minutes; if email id is not registered, the physical account statement will be dispatched within one day from the date of request. Alternatively the investor can also talk to our call center agent and request for an email or physical account statement

2)Email: The investor can also write an email to with the subject ‘Account Statement’. If the email id is available, the account statement will be emailed within one business day; if email id is not registered, the physical account statement will be dispatched within one business day from the date of request.

3)ITI Asset Management Limited branches or ISC : The investor can walk in to any of our Investor Service Centre/branch and request an Account Statement.

Can investors appoint nominees for their investments in mutual fund units?

Yes. Nominations may be made by individuals applying for or holding units on their own behalf, either singly or jointly. Those who cannot nominate are - Non-individuals including societies, trusts, corporate bodies, partnership firms, Kartas of Hindu undivided families, or holders of power of attorney.

Can I switch between funds?

You may switch all or part of your investments in one fund to another available fund. AMCs do not charge fees for such switches. To process a switch, you need to provide clear instructions by completing a form and submitting it on any business day at an investor service centre, or the office of registrar or transfer agent. An account statement reflecting the new holdings will be sent to you within three days of completion of transaction.

Who is the custodian?

The custodian is the company responsible for the possession, handling and safekeeping of all securities purchased by the mutual fund.

Who are the Registrar and Transfer Agent?

The Registrar and Transfer agent is responsible for keeping the records and processing the transaction of the investors.

I’ve noticed that there are many mutual fund schemes available in the same category. Should I choose the scheme with
the lowest NAV?

Some investors prefer schemes that are available at low NAVs. However, remember that in the case of mutual funds schemes, low or high NAVs have little or no relevance. The schemes should be chosen based on factors such as the funds past performance, service standards and level of professional management.

What are ‘Fundamental Attributes’ of a scheme?

The following are classified as ‘Fundamental Attributes’ as per clause (d) of sub-regulation (15) of regulation 18:

Type of a scheme

  • Open ended/Close ended/Interval scheme
  • Sectoral Fund/Equity Fund/Balance Fund/Income Fund/Index Fund/Any other type of Fund

Investment Objective

  • Main Objective - Growth/Income/Both
  • Investment pattern - The tentative Equity/Debt/Money-Market portfolio ratio with minimum and maximum asset allocation, while retaining the option to alter the asset allocation for a short term period on defensive considerations.

Terms of Issue

  • Liquidity provisions such as listing, repurchase, redemption.
  • Aggregate fees and expenses charged to the scheme.
  • Any safety net or guarantee provided.

What are the inherent risks in mutual funds?

Equity Funds are open to market risks; the price of the stocks in which the fund has invested may reduce. Conversely, the prices may go up, enabling the funds to earn profits. Debts Funds are open to credit and interest rate risks.

Are mutual fund schemes suitable for small/retail investors?

Small/Retails investors may not have the time or skills to monitor and analyze stock markets movements which is why they find mutual funds more suitable to their needs.

What happens to the money I have invested in a mutual fund scheme if it winds up?

If a scheme winds up, the mutual funds pays investors a sum based on the prevailing NAV, after adjustment of expenses. Unit holders are entitled to receive a detailed report on the wind-up from the mutual fund company.

What is a folio number?

A folio number, like a bank account number depicts your holdings in schemes of the fund house. There is no restriction on the number of folios that one can have with a fund house. However it is good housekeeping to have a minimal number of folios as it eases the task of tracking your investments.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.