· Mutual funds issues you units against your investment, just like share issued in case of companies · Pricing of units are measured price per unit, called net asset value (NAV) of the unit. Just a share or bond is bought and sold at a price, a mutual fund is bought and sold at its NAV · Fund houses calculate, disclose the NAVs of their scheme daily · sometime you have to pay 'load' and it is the price you pay over and above the fund's NAV when you buy or sell units · You can sell your units, partly or fully back to your funds whenever you want. Although it's a sale from your point of view, in mutual fund parlance it is called 'repurchase' or 'redemption' · Based on the accessibility they provide investors, schemes can be classified into 'open ended' and 'closed ended' · The open ended schemes don’t have a fixed tenure and always are open for investment. You can invest or withdraw any time · Closed scheme on the other hand are of fixed tenure, which is stated at the time of their birth itself. These invite subscriptions only once during their life time, at the time of launch. You can sell your units in the market · Equity based savings schemes (ELSS) are diversified equity funds that also offer income tax benefits to individuals · Index funds mirrors an index, both in its choice of stocks and their percentage holding · Sector funds invest in stocks from only one sector or a handful of sectors · Mid cap funds are diversified funds that target companies on the fast growth trajectory · Debt funds are scheme that invest only in fixed income instruments such as company bonds, debentures and government securities where you know much return you are going to get by way of interest, and when · Gilt funds invest only in debt instruments issued by the government, namely T bills and G SecsThe mutual funds sends you an account statement which is proof of your holding in it · Any one can walk into a mutual fund office and buy and sell units of its shemes · Can buy through directly, through agents or through certain banks · Safety- Safety of your investment depends on the unit you have invested on. Units of debt funds are more safe than the equity funds · Liquidity- Mutual funds investment are very liquid, can be encased easily · Capital Appreciation - Capital appreciation/depreciation is relatively less than investment in pure equity · Returns - Returns can be better than fixed return investments such as bank deposits, NSC in the long run · Tax benefits- Under Section 80C, individuals can claim upto Rs one lakh as deduction from taxable income. · Fill up a simple form, and hand over a cheque.
· You fill up one those small print forms lined up on market pavements, make out a cheque and deposit both at one of the designated place · If you are selling units, the relevant document is a redemption form which can sometimes forms part of you account statement and can be torn off
· 1st recourse- In case of any clarification or complaint regarding your investment, approach your fund house or its registrar · 2nd recourse- SEBI contact details West Zone (Head Office) Plot No. C4-A, G Block Bandra Kurla Complex Bandra (East), Mumbai 400051 tel 022-26449000 email- sebi@sebi.gov.in North Zone The Regional Manager, 5th floor Bank of Baroda Building, 16, Sansad Marg New Delhi 110001 Tel 011-23724001 email- sebinro@sebi.gov.in
South Zone The Regional Manager, D' Monte Building 3rd Floor, 32 D' Monte Colony, TTK Road Alwarpet, Chennai 600018 Tel 044-24995676 email- sebisro@sebi.gov.in
East Zone (Head Office) The Regional Manager, L & T Chambers, 3rd Floor 16, Camac Street, Kolkata 700017 Tel 033-22402435 email- sebiero@sebi.gov.in
Investor Associations Consumer Education and Research Society Consumer Unity and Trust Society Investors Grievances Forum Midas Touch Investors Association |