Mutual Fund

What is a mutual fund?

As the name suggests, it is a fund invested mutually. Mutual fund is a fund invested by several investors, who share the profit or loss in proportion to the invested funds. The amount, thus accumulated is then invested in various assets like equities, debts etc. These investments are selected by professionals, who aims to create the best suitable portfolio in anticipation of high returns. Portfolio is the set of combination of different assets and securities.

Mutual funds are registered by SEBI (Securities & Exchange Board of India), who regulates the security markets in India.

Type of mutual funds

Benefits of Mutual Funds


How to fill up the application form of a mutual fund scheme?

An investor must mention properly the name, address, number of units applied for and other information as required in the application form. Know your Customer (KYC) documents need to be submitted by a first time investor.

What is a direct plan?

SEBI has directed mutual funds to compulsorily launch a direct plan for direct investments, i.e., investments not routed through a distributor, from 01 January 2013.

What is a Systematic Investment Plan (SIP)?

A SIP allows an investor to invest regularly. One puts in a small amount every month that is invested in a mutual fund.

Can I invest in Cash?

Yes, cash investments up to INR 50,000 per investor, per mutual fund, per financial year can be made in mutual funds.

How much should one invest in debt or equity oriented schemes?

There are many factors which are to be considered by an investor like risk taking capacity, age factor, financial position, etc. Investors may also consult financial experts before taking decisions.

As a unit holder, how much time will it take to receive dividends/repurchase proceeds?

A mutual fund is required to dispatch the dividend warrants within 30 days of the declaration of the dividend and the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase request made by the unit holder.

When will the investor get certificate or statement of account after investing in a mutual fund?

Mutual funds are required to dispatch the certificates or statements of accounts within five working days from the date of closure of the initial subscription of the scheme.

How will an investor come to know about the changes, if any, which may occur in the mutual fund?

The mutual funds are required to inform any material changes to their unit holders. Apart from it, many mutual funds send quarterly newsletters to their investors.

The mutual funds are required to disclose full portfolios of all of their schemes on a monthly basis on their website. Portfolio disclosure on a half yearly basis is published in the newspapers. Mutual funds may also send the disclosure of half-yearly portfolios to their unit holders.

Where can I check whether there is any unclaimed amount (dividend/redemption) in my name lying with a mutual fund?

Mutual Funds provide on their website, the list of names and addresses of investors in whose folios there are unclaimed amounts (dividend/redemption).

If mutual fund scheme is wound up, what happens to money invested?

In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unit holders are entitled to receive a report on winding up from the mutual funds which gives all necessary details.

How can investors redress their complaints?

Investors would find the name of contact person in the offer document of the mutual fund scheme who they may approach in case of any query, complaints or grievances.