PowerMF is a Platform that will enable investors to invest in wide ranging schemes of a large number of Mutual Funds in India. It will provide comprehensive information one would need in order to take informed decisions on investing in the right scheme and for managing efficiently investments made in various mutual fund schemes of Indian Mutual Fund Industry. It also provides comprehensive Selection and Analytical tools for decision making.accordance with objectives as disclosed in offer document.

You can open account with PowerMF in various ways: To start with, you can Register for a 'Trial Account' by providing a few basic information. This will enable you to experience the services offered by PowerMF on its platform. Subsequent to Trial Registration, you can Register and Open a Relationship Account with PowerMF in any of the following ways:

1. Online account opening:
a.You can access the link Register Link after loging in with your Trial Account. This will ask for basic informations required for opening a Mutual Fund Account including Demographic Details, Bank Details, Nominee Details etc.
b. A courier containing the application form will be sent to your correspondence address given updated
c. What you need to do is just to sign in the specified places in the docuement sent.
d. In addition, you will have to enclose your photograph (2 copies), PAN card copy, Address Proof
e. The payment towards account opening can be made through cheque
f. Courier back the form to PowerMF or you can deliver the same to Karvy Computershare Pvt. Ltd. - Mutual Fund Services Division, Unit PowerMF in any of the collection centers mentioned Here

2. Register Through Call center
a. After opening your trial account, you can call the Toll Free Call Center (1800 2 66666)
b. Please provide the details required to be filled in the application form over phone.
c. A courier containing the application form will be sent to your correspondence address given updated
d. What you need to do is just to sign in the specified places in the docuement sent.
e. In addition, you will have to enclose your photograph (2 copies), PAN card copy, Address Proof
f. The payment towards account opening can be made through cheque
g. Courier back the form to PowerMF or you can deliver the same to Karvy Computershare Pvt. Ltd. - Mutual Fund Services Division, Unit PowerMF in any of the collection centers mentioned Here

3.Take the help of a PowerMF executive during the events which are organized in various places for enabling account opening

The pre requisites for opening a PowerMF account are:
a. Application form in the specified format duly filled in
b. Agreement on a Rs. 20 stamp paper duly signed
c. Power of Attorney on a Rs. 100 Stamp Paper duly signed
d. Proof of Address (Passport, Ration Card, Driving License, Voter ID or a Recent (not more than 2 months from the date of the application form) Land Line Telephone Bill, Electricity Bill, Bank Account Statement showing the address)
e. Proof of Identity (Passport, PAN card, Driving License)
f. Copy of the PAN Card
g. 2 recent passport size Photographs
h. Payment of fees as per the scheme chosen
i. KYC Form Duly Filled In
j. A cancelled cheque from the Bank Account which is provided in the application form

Any resident Indian desirous and eligible for investing in Mutual Funds in India can open a PowerMF account. This includes Individuals, HUF, Minor (through their Natural Guardian) Corporate clients (separate form).

The procedure for opening an account for an NRI is separate and this is expected to be launched soon.

You can Transact in various MF schemes across AMCs

Sophisticated tools available for decision making / scheme selection

PowerMF has no specific interest in any specific AMC / schemes

Synchronized objective

PowerMF and yourself enabling transparent and efficient management of your mutual fund investments

quality technology solution to track all your MF investments in a click

Top quality service proposition

Web based investment

STP with registrar

security state of the art

Confidentiality of data

Tax and other services to make effective investment

Toll Free Call Center Agent to assist you in case of need

Effective tools for portfolio administration and management

Triggers and alerts

Consolidated portfolio statement

Portfolio analysis – XIRR, Gain / Loss Report, Asset Allocation

Portfolio Analytics – Sector / Stock exposures

Watch List

There are multiple options that are enabled on the platform:

a. Use the payment gateway. The platform is connected to 13 banks through a payment gateway. In case you have accounts with any of the banks mentioned in this and have an internet transaction enabled on your bank account, you can transfer funds online. This will be quick and efficient way of investing for you.

b. Use Cheque Payment: In case you do not have an internet access to your bank account or if your bank account is with any of the banks where there is no payment gateway facility provided by PowerMF, or just that you are comfortable with cutting a cheque rather than using the new technological gadgets, what you have to do in such a case is to use the specific Transaction Slip that is specific to you providing your details in the format (enclose format) and deposit the slip along with the cheque (after entering your transactions and your intention to use cheque payment as an option for the payment towards the investment) The cheque must be deposited with the collection centers of PowerMF as per List Please note that only after the encashment of the cheque the transaction will be taken up for processing.

c. ECS & Direct Debit with certain Banks – Only for SIP transactions you can use the ECS / Direct Debit facility. ECS mandate is a part of the Account Opening Kit, which is required to be signed and delivered by you at the time of Registration. In case the ECS mandate is not already registered, or you are opening ECS with a different bank account, a copy of the ECS Mandate can be downloaded, signed and despatched to PowerMF (along with a cancelled cheque of the Bank) duly signed. Kindly note that the first ECS / Direct Debt Transaction can be only after 21 working days from the date of receipt of the ECS Mandate with PowerMF. Please note that the ECS debit will happen 2 days before the date of the transaction in order to have clear credit at the time of executing the transaction with AMCs.

d. Other options: Other options like RTGS and Direct Debit are being explored which will be included going forward.

can make payment for the PowerMF account in any of the following ways:

a. You can also draw a cheque in the name of eFIN Services India (P) Ltd. A/c PowerMF and deposit the same with the collection Center.

b. You can also transfer the fees through payment gateway

c. ECS mandate is required to be given for the purpose of debiting the account for the annual and periodic dues.

can do both Commercial and Non Commercial transactions on the PowerMF platform. Commercial Transactions:

a. Purchase
b. Additional Purchase
c. Redemption
d. Systematic Investment Plan
e. Systematic Withdrawal Plan
f. Systematic Transfer Plan

Non Commercial Transactions:

a. Change of Address / Bank Account / email / Mobile No. etc. b. Alerts on your investment based on various parameters like % growth, Index Value, AUM value etc. c. Obtain a consolidated Portfolio Statement across all you investment through the platform d. Reports for the purpose of calculation of Capital Gains and Dividend Incomes for the purpose of Income Tax e. Freeze your account from accessing for a specific period of time when you are sure not to use it so that there is no possibility of any access to your account by anyone. f. Set up your own communication calendar on your investments g. Creation and tracking of Model Portfolios h. Referring your friends to become a member i. Blog for voicing your views on the services and products of PowerMF

The list of AMCs the schemes of which you can make transactions through PowerMF is available in the link www.powermf.com/amc.aspx. Other AMCs are also in the pipeline and it is believed that all the AMCs will be available for transactions on this Platform soon.

Yes, you can. However for this purpose, you will have to make a request letter in the specified format to the AMC / Registrar of the schemes you have already invested asking for the transfer of the folios to the Platform for all future purposes.

a portfolio tracking tool, you can enter all your existing investment in the ‘Transition Portfolio'. However, please note that only based on the information entered by you, the portfolio is tracked as without the transfer of the folios to the Platform, PowerMF does not have access to the transactions that are executed on these folios.

Effective portfolio tracking tools are part of the Platform. This will enable you to see the following:

a. Get a statement of all the transactions made by you through the platform
b. Take a portfolio statement providing the details of investments along with the current value there of as of any specific date and the dividends received during a specific time period. This will also provide you with the details of profits / losses booked during a specific period
c. Analysis of the performance of the schemes invested in by you vis-à-vis benchmarks, peers and other schemes (conditions apply)
d. Tracking of the allocation of the investment made by you across various asset classes based on the scheme specifications
e. Tracking of the allocation of the investments across the schemes on a weighted average basis (conditions apply)
f. XIRR / Yield on the investment for a specified period (conditions apply)

will be able to get various information that are relevant with respect to the mutual fund investments in this platform including:

a. Scheme performance across all the mutual fund schemes which are part of the platform
b. Scheme portfolio as declared by the AMC
c. Portfolio analysis including Rating, sector, Industry, asset class and other classifications
d. Various ratios that are relevant for scheme (alpha, beta, sharpe, standard deviation etc.)
e. News, Regulatory and market developments as relates to Mutual fund industry
f. Commentary from various fund managers and house views
g. Key Information Memorandum and Prospectus of various schemes
h. Dividend history and other relevant information with respect to scheme performance
i. Forthcoming NFO, Dividends, Bonus and other corporate actions

The cheque must be drawn in favor of 'PowerMF Customer Account No. xxxxxx'

The account in which the investment is made is Customer Account opened by PowerMF exclusively for the purpose of ensuring ease of transaction for you. The beneficiary of the amounts lying in the account is only the investor and not PowerMF. Further, the payments out of this account can only be paid to the AMC and in exceptional cases to the investors accounts (where the transaction is rejected for any reason whatsoever). The reason for having a single account is to ensure that you have the freedom to invest in multiple schemes at a time (it is understood that a normal investor invests in 2 schemes at a time) without the problem of having to transfer funds online or write out cheques multiple times. Further, the agreement entered in to between PowerMF and you clearly specify that PowerMF account will be only used as a pass through and not for any other purpose except payment for the transaction request entered by you.

case of a redemptions, the refunds will come directly to you from the Mutual Fund. There are various options available for you to get the redemption amount the most effective of which are Direct Credit or ECS. Based on the bank details provided by you refunds will be made by the Registrar to the AMC through these methods or through warrant which will be directly dispatched to you from the AMC.

need to transfer funds only once for up to 4 purchase transactions at a time. You can invest in up to 4 schemes at a time with a single fund transfer. Same is applicable to cheque payment also.

You will get the redemption proceeds individually for each of the schemes. As the redemptions are settled directly by the Registrar to a Mutual Fund scheme there is no consolidated redemption.

platform is an online one and you can log in with your login Id and password. Further, it is a 24*7 order taking platform (except when closed for mainenence). This will enable you to make the transactions online. This is a must for a transaction where the payment is made through online transfer funds using the payment Gateway. With respect to investments made through cheque payment, the transaction slip can be filled in and the same can be delivered to any of our Collection Center(s) along with the cheque towards payment for purchases where applicable.

At the time of registration, a phone number and an email id have to be provided which will be considered as a Registered Email ID / Phone Number. It may be noted that all the communications from PowerMF will be made only to the said Registered Phone Number / email ID. The account statements for the investments made will also be sent only to the said email id.

Further, with respect to purchase transactions through cheque, the call to the Transactions Contact Center will be accepted only when received from the Registered Phone Number.

Yes, you can change your Registered Phone Number and the Email ID. However, it is not possible to change both the numbers at the same time. This is owing to the security reasons. It is necessary that no systemic opportunity is given to someone for the change of complete contact details which will enable misuse of the system.

transactions done on the PowerMF platform will be confirmed both by SMS as well as by email. Hence, as long as you have access to the Registered Mobile Number and Registered Email ID and review the SMS / Mails received on a regular basis, you will come to know of the transaction even before it is processed enabling you to rectify the situation. Hence, care should be taken to ensure that you do access the SMS and email very regularly to avoid any problem. Further, you also have an option to freeze the account. This can be done when you are sure that for certain reasons (like traveling abroad) that you are not there to use the account for an extended period of time (say 6 months) you can get your account frozen. Only on your return and only after you have activated the account any further transactions can be done on this account.

process is very simple. You will have to send an email from your Registered Email ID confirming that you want to de-freeze the account. This request will trigger a call from the call center to your Registered Mobile Number asking for some basic details to verify the credentials. After this, an email will be received by you for the purpose of activation. On filling up the details on the activation sheet, which will include entering a password which will be sent to your registered mobile. Only when the details are completely entered, your account will be opened up for further transactions.

will have a password for accessing the system.
With respect to the login password:
The initial password will be either what is given by you at the time of applying for the account online or system generated (if the account is not opened by you online) and given to you. Subsequent to the receipt of the same at the time of first login you will have to give your own password. There are various conditions for the password viz.

a. Should be a minimum of 8 characters
b. Alphabets (atleast one in each CAPS and lower Letters), Numerals and Special Characters have to be used to make the password secure
c. The password will be valid for a period of 6 months. However, you have the option to change the password even before the expiry time

No. You will also receive a Telephone Identification Number (TIN) which will be a 4 character numeric value. You should use only this TIN number for the purpose of transactions over phone. However, for the online transactions the password along with the login id is enough along with the access to your bank online account.

providing the requisite details correctly, you can reset your password. In case you have entered the details sought for password reset incorrectly, then a password will be generated and sent to you by PowerMF. New password will be generated and sent to you through a secured physical mail or with cross validation from both the Registered Email ID as well as Registered Mobile Number similar to the account de freeze option.

nomination is possible for the PowerMF account. The details of the nominee have to be provided in advance at the time of registration. This nomination will be applicable for all the investments made through the said PowerMF account.

can request for the change of nomination online. On completion of the form, a letter requesting the nomination will be generated. The same has to be signed and reached to PowerMF at ….. by courier / speed post.
Alternatively, a written request can be sent to PowerMF. On receipt of the same, the nomination change will be effected. Where necessary, customer will be called for clarification. Subject to clarification, the nomination details will be updated. It may be noted that 15 days time has to be given before the nomination can be updated.

can close the PowerMF account by giving a request in writing for the purpose. The account will be closed if there is no investment available (both investments made through the platform and those which were transferred to the platform). However, the account CANNOT be closed when there is a live investment in the same.

Subject to the approval of the AMC the transfer can be done.

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders.

The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

Unit Trust of India was the first mutual fund set up in India in the year 1963. In early 1990s, Government allowed public sector banks and institutions to set up mutual funds.

In the year 1992, Securities and exchange Board of India (SEBI) Act was passed. The objectives of SEBI are – to protect the interest of investors in securities and to promote the development of and to regulate the securities market.

2. Register Through Call center
a. After opening your trial account, you can call the Toll Free Call Center (1800 2 66666)
b. Please provide the details required to be filled in the application form over phone.
c. A courier containing the application form will be sent to your correspondence address given updated
d. What you need to do is just to sign in the specified places in the docuement sent.
e. In addition, you will have to enclose your photograph (2 copies), PAN card copy, Address Proof
f. The payment towards account opening can be made through cheque
g. Courier back the form to PowerMF or you can deliver the same to Karvy Computershare Pvt. Ltd. - Mutual Fund Services Division, Unit PowerMF in any of the collection centers mentioned Here

All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. The risks associated with the schemes launched by the mutual funds sponsored by these entities are of similar type.

A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund.

SEBI Regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme.

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV).

Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.

Schemes according to Maturity Period:

A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period.

Open-ended Fund/ Scheme:

An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

Close-ended Fund/ Scheme :

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective :

A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows:

Growth / Equity Oriented Scheme :

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes.

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. They may also seek advice of an expert.

These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. e.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.

scheme that invests primarily in other schemes of the same mutual fund or other mutual funds is known as a FoF scheme. An FoF scheme enables the investors to achieve greater diversification through one scheme. It spreads risks across a greater universe.

A Load Fund is one that charges a percentage of NAV for entry or exit. That is, each time one buys or sells units in the fund, a charge will be payable. This charge is used by the mutual fund for marketing and distribution expenses. Suppose the NAV per unit is Rs.10. If the entry as well as exit load charged is 1%, then the investors who buy would be required to pay Rs.10.10 and those who offer their units for repurchase to the mutual fund will get only Rs.9.90 per unit. The investors should take the loads into consideration while making investment as these affect their yields/returns. However, the investors should also consider the performance track record and service standards of the mutual fund which are more important. Efficient funds may give higher returns in spite of loads.

A no-load fund is one that does not charge for entry or exit. It means the investors can enter the fund/scheme at NAV and no additional charges are payable on purchase or sale of units.

Mutual funds cannot increase the load beyond the level mentioned in the offer document. Any change in the load will be applicable only to prospective investments and not to the original investments. In case of imposition of fresh loads or increase in existing loads, the mutual funds are required to amend their offer documents so that the new investors are aware of loads at the time of investments.

The price or NAV a unit holder is charged while investing in an open-ended scheme is called sales price. It may include sales load, if applicable.

Repurchase or redemption price is the price or NAV at which an open-ended scheme purchases or redeems its units from the unit holders. It may include exit load, if applicable.

Assured return schemes are those schemes that assure a specific return to the unit holders irrespective of performance of the scheme.

A scheme cannot promise returns unless such returns are fully guaranteed by the sponsor or AMC and this is required to be disclosed in the offer document.

Investors should carefully read the offer document whether return is assured for the entire period of the scheme or only for a certain period. Some schemes assure returns one year at a time and they review and change it at the beginning of the next year.

Considering the market trends, any prudent fund managers can change the asset allocation i.e. he can invest higher or lower percentage of the fund in equity or debt instruments compared to what is disclosed in the offer document. It can be done on a short term basis on defensive considerations i.e. to protect the NAV. Hence the fund managers are allowed certain flexibility in altering the asset allocation considering the interest of the investors. In case the mutual fund wants to change the asset allocation on a permanent basis, they are required to inform the unit holders and giving them option to exit the scheme at prevailing NAV without any load.

Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now a days, the post offices and banks also distribute the units of mutual funds. However, the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of returns is given by them. The only role of banks and post offices is to help in distribution of mutual funds schemes to the investors.

Investors should not be carried away by commission/gifts given by agents/distributors for investing in a particular scheme. On the other hand they must consider the track record of the mutual fund and should take objective decisions.

Yes, non-resident Indians can also invest in mutual funds. Necessary details in this respect are given in the offer documents of the schemes.

An investor should take into account his risk taking capacity, age factor, financial position, etc. As already mentioned, the schemes invest in different type of securities as disclosed in the offer documents and offer different returns and risks. Investors may also consult financial experts before taking decisions. Agents and distributors may also help in this regard.

An investor must mention clearly his name, address, number of units applied for and such other information as required in the application form. He must give his bank account number so as to avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date for the purpose of dividend or repurchase. Any changes in the address, bank account number, etc at a later date should be informed to the mutual fund immediately.

An abridged offer document, which contains very useful information, is required to be given to the prospective investor by the mutual fund. The application form for subscription to a scheme is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer document. An investor, before investing in a scheme, should carefully read the offer document. Due care must be given to portions relating to main features of the scheme, risk factors, initial issue expenses and recurring expenses to be charged to the scheme, entry or exit loads, sponsor’s track record, educational qualification and work experience of key personnel including fund managers, performance of other schemes launched by the mutual fund in the past, pending litigations and penalties imposed, etc.

Mutual funds are required to dispatch certificates or statements of accounts within six weeks from the date of closure of the initial subscription of the scheme. In case of close-ended schemes, the investors would get either a demat account statement or unit certificates as these are traded in the stock exchanges. In case of open-ended schemes, a statement of account is issued by the mutual fund within 30 days from the date of closure of initial public offer of the scheme. The procedure of repurchase is mentioned in the offer document.

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV).

According to SEBI Regulations, transfer of units is required to be done within thirty days from the date of lodgment of certificates with the mutual fund.

There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

A mutual fund is required to dispatch to the unit holders 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.

In case of failures to dispatch the redemption/repurchase proceeds within the stipulated time period, Asset Management Company is liable to pay interest as specified by SEBI from time to time (15% at present).

Yes. However, no change in the nature or terms of the scheme, known as fundamental attributes of the scheme e.g. structure, investment pattern, etc. can be carried out unless a written communication is sent to each unit holder and an advertisement is given in one English daily having nationwide circulation and in a newspaper published in the language of the region where the head office of the mutual fund is situated. The unit holders have the right to exit the scheme at the prevailing NAV without any exit load if they do not want to continue with the scheme. The mutual funds are also required to follow similar procedure while converting the scheme form close-ended to open-ended scheme and in case of change in sponsor.

There may be changes from time to time in a 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.

At present, offer documents are required to be revised and updated at least once in two years. In the meantime, new investors are informed about the material changes by way of addendum to the offer document till the time offer document is revised and reprinted.

There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

The performance of a scheme is reflected in its net asset value (NAV) which is disclosed on daily basis in case of open-ended schemes and on weekly basis in case of close-ended schemes. The NAVs of mutual funds are required to be published in newspapers. The NAVs are also available on the web sites of mutual funds. All mutual funds are also required to put their NAVs on the web site of Association of Mutual Funds in India (AMFI) www.amfiindia.com and thus the investors can access NAVs of all mutual funds at one place

The mutual funds are also required to publish their performance in the form of half-yearly results which also include their returns/yields over a period of time i.e. last six months, 1 year, 3 years, 5 years and since inception of schemes. Investors can also look into other details like percentage of expenses of total assets as these have an affect on the yield and other useful information in the same half-yearly format.

The mutual funds are also required to send annual report or abridged annual report to the unit holders at the end of the year.

Various studies on mutual fund schemes including yields of different schemes are being published by the financial newspapers on a weekly basis. Apart from these, many research agencies also publish research reports on performance of mutual funds including the ranking of various schemes in terms of their performance. Investors should study these reports and keep themselves informed about the performance of various schemes of different mutual funds.

Investors can compare the performance of their schemes with those of other mutual funds under the same category. They can also compare the performance of equity oriented schemes with the benchmarks like BSE Sensitive Index, S&P CNX Nifty, etc.

On the basis of performance of the mutual funds, the investors should decide when to enter or exit from a mutual fund scheme.

The mutual funds are required to disclose full portfolios of all of their schemes on half-yearly basis which are published in the newspapers. Some mutual funds send the portfolios to their unit holders.

The scheme portfolio shows investment made in each security i.e. equity, debentures, money market instruments, government securities, etc. and their quantity, market value and % to NAV. These portfolio statements also required to disclose illiquid securities in the portfolio, investment made in rated and unrated debt securities, non-performing assets (NPAs), etc.

Some of the mutual funds send newsletters to the unit holders on quarterly basis which also contain portfolios of the schemes.

Yes, there is a difference. IPOs of companies may open at lower or higher price than the issue price depending on market sentiment and perception of investors. However, in the case of mutual funds, the par value of the units may not rise or fall immediately after allotment. A mutual fund scheme takes some time to make investment in securities. NAV of the scheme depends on the value of securities in which the funds have been deployed.

Some of the investors have the tendency to prefer a scheme that is available at lower NAV compared to the one available at higher NAV. Sometimes, they prefer a new scheme which is issuing units at Rs. 10 whereas the existing schemes in the same category are available at much higher NAVs. Investors may please note that in case of mutual funds schemes, lower or higher NAVs of similar type schemes of different mutual funds have no relevance. On the other hand, investors should choose a scheme based on its merit considering performance track record of the mutual fund, service standards, professional management, etc. This is explained in an example given below.

Suppose scheme A is available at a NAV of Rs.15 and another scheme B at Rs.90. Both schemes are diversified equity oriented schemes. Investor has put Rs. 9,000 in each of the two schemes. He would get 600 units (9000/15) in scheme A and 100 units (9000/90) in scheme B. Assuming that the markets go up by 10 per cent and both the schemes perform equally good and it is reflected in their NAVs. NAV of scheme A would go up to Rs. 16.50 and that of scheme B to Rs. 99. Thus, the market value of investments would be Rs. 9,900 (600* 16.50) in scheme A and it would be the same amount of Rs. 9900 in scheme B (100*99). The investor would get the same return of 10% on his investment in each of the schemes. Thus, lower or higher NAV of the schemes and allotment of higher or lower number of units within the amount an investor is willing to invest, should not be the factors for making investment decision. Likewise, if a new equity oriented scheme is being offered at Rs.10 and an existing scheme is available for Rs. 90, should not be a factor for decision making by the investor. Similar is the case with income or debt-oriented schemes.

On the other hand, it is likely that the better managed scheme with higher NAV may give higher returns compared to a scheme which is available at lower NAV but is not managed efficiently. Similar is the case of fall in NAVs. Efficiently managed scheme at higher NAV may not fall as much as inefficiently managed scheme with lower NAV. Therefore, the investor should give more weightage to the professional management of a scheme instead of lower NAV of any scheme. He may get much higher number of units at lower NAV, but the scheme may not give higher returns if it is not managed efficiently.

already mentioned, the investors must read the offer document of the mutual fund scheme very carefully. They may also look into the past track record of performance of the scheme or other schemes of the same mutual fund. They may also compare the performance with other schemes having similar investment objectives. Though past performance of a scheme is not an indicator of its future performance and good performance in the past may or may not be sustained in the future, this is one of the important factors for making investment decision. In case of debt oriented schemes, apart from looking into past returns, the investors should also see the quality of debt instruments which is reflected in their rating. A scheme with lower rate of return but having investments in better rated instruments may be safer. Similarly, in equities schemes also, investors may look for quality of portfolio. They may also seek advice of experts.

Investors should not assume some companies having the name "mutual benefit" as mutual funds. These companies do not come under the purview of SEBI. On the other hand, mutual funds can mobilise funds from the investors by launching schemes only after getting registered with SEBI as mutual funds.

the offer document of any mutual fund scheme, financial performance including the net worth of the sponsor for a period of three years is required to be given. The only purpose is that the investors should know the track record of the company which has sponsored the mutual fund. However, higher net worth of the sponsor does not mean that the scheme would give better returns or the sponsor would compensate in case the NAV falls.

Almost all the mutual funds have their own web sites. Investors can also access the NAVs, half-yearly results and portfolios of all mutual funds at the web site of Association of mutual funds in India (AMFI) www.amfiindia.com. AMFI has also published useful literature for the investors.

Investors can log on to the web site of SEBI www.sebi.gov.in and go to "Mutual Funds" section for information on SEBI regulations and guidelines, data on mutual funds, draft offer documents filed by mutual funds, addresses of mutual funds, etc. Also, in the annual reports of SEBI available on the web site, a lot of information on mutual funds is given.

There are a number of other web sites which give a lot of information of various schemes of mutual funds including yields over a period of time. Many newspapers also publish useful information on mutual funds on daily and weekly basis. Investors may approach their agents and distributors to guide them in this regard.

Yes. The nomination can be made by individuals applying for / holding units on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of Power of Attorney cannot nominate.

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.

would find the name of contact person in the offer document of the mutual fund scheme whom they may approach in case of any query, complaints or grievances. Trustees of a mutual fund monitor the activities of the mutual fund. The names of the directors of asset Management Company and trustees are also given in the offer documents. Investors should approach the concerned Mutual Fund / Investor Service Center of the Mutual Fund with their complaints, If the complaints remain unresolved, the investors may approach SEBI for facilitating redressal of their complaints. On receipt of complaints, SEBI takes up the matter with the concerned mutual fund and follows up with it regularly. Investors may send their complaints to:

Securities and Exchange Board of India Office of Investor Assistance and Education (OIAE)
Exchange Plaza, “G” Block, 4th Floor,
Bandra-Kurla Complex,
Bandra (E), Mumbai – 400 051.
Phone: 26598510-13

An applicant proposing to sponsor a mutual fund in India must submit an application in Form A along with a fee of Rs.25,000. The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a mutual fund. These include inter alia, executing the trust deed and investment management agreement, setting up a trustee company/board of trustees comprising two- thirds independent trustees, incorporating the asset management company (AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs.25.00 lacs For details, see the SEBI (Mutual Funds) Regulations, 1996.