Can I nominate another individual?
Individuals, on their own behalf, singly or jointly can nominate. A unit holder can, at the time an application is made, or by subsequently writing to an ISCs, request for a nomination form in order to nominate not more than three individuals, to receive the units upon his/her death, subject to completion of the necessary formalities, e.g. proof of death of the unit holder, signature of the nominees, furnishing of proof of guardianship in case a nominee is a minor, execution of indemnity bond or such other document as may be required from the nominee(s) in favour of and to the satisfaction of the Mutual Fund, the AMC, or the Trustee.
If the units are held jointly, all joint unit holders will be required to sign the nomination form, even incase of ‘Either or Survivor’.
Investors shall indicate clearly the percentage of allocation/share in favour of each of the nominees against their names, and such allocation/share shall be in whole numbers without any decimals.
In the event of the investor not indicating the percentage of allocation/share for each of the nominees, the AMC shall settle the claim equally amongst all the nominees.
A minor can be nominated and in that event, the name and address of the guardian of the minor nominee shall be provided by the unit holder. Nomination can also be in favour of the Central Government, State Government, a local authority, any person designated by virtue of his office or a religious or charitable trust. The Nominee shall not be a trust, other than a religious or charitable trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family or a Power of Attorney holder. A non-resident Indian can be a Nominee subject to the exchange controls in force, from time to time.
Can I cancel / change my nomination?
Cancellation of nomination can be made only by those individuals who hold units on their own behalf, singly or jointly, and who made the original nomination. On cancellation, the nomination shall stand rescinded and the AMC/Mutual Fund shall not be under any obligation to transfer the units in favour of any of the nominees.
Transfer of units/payment to a nominee of the sums shall be valid and effectual against any demand made upon the Trust/AMC, and shall discharge the Trust/AMC of all liability towards the estate of the deceased unit holder and his/her successors and legal heirs, executors and administrators
Do I get any incentive if I apply through a distributor?
SEBI has strictly banned rebates/ gifts/ commissions to an investor either directly or indirectly. The only advantages of approaching a distributor include professional investment advice and personal service.
What are the benefits of investing in a mutual fund?
Some positives of investing in a mutual fund include:
* Money is managed by experienced and skilled professionals
* Diversification over a large number of companies and industries, thus reducing the element of risk.
* Liquidity, especially in an open-end fund.
* Costs of research and of investing directly in the individual securities are spread over a large corpus and thousands of investors.
* High degree of transparency in the operation of a mutual fund.
* Choice of schemes to suit your needs.
* Well-regulated industry with many measures oriented towards investor protection.
What are the risks involved in investing in a mutual fund?
Equity Funds are exposed to market risk i.e. there is a possibility that the price of the stocks in which the Fund has invested could decrease. Of course, the prices may also increase, making it possible for the fund to earn profits.
Debts Funds are exposed to two main risks:
Credit Risk
* The company in whose bonds the fund has invested could default on the payment of its interest or principal.
Interest Rate Risk
* The price of the bond in which the Fund has invested may decrease because of an increase in the interest rates. In general, it is useful to remember that this is a "see-saw" relationship - bond prices (and therefore, NAVs) increase when interest rates decrease and vice versa.
Please refer to the Scheme Information Document and Statement of Additional Information for a more comprehensive set of risks before considering investing in any scheme.
How are the mutual funds regulated?
The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare one with another. All mutual funds are required to register with SEBI, who regularly monitors their operations. Mutual funds are obliged to follow strict regulations designed to protect investors.
What is the difference between open-ended and closed-ended schemes?
Open-ended funds do not have a fixed maturity whereas closed-ended schemes have a stipulated maturity period. New investors can join an open-ended scheme by directly subscribing to the mutual fund at applicable NAV-related prices. However for close-ended schemes new investors can only purchase units from the secondary market. This results in the daily fluctuation of the unit capital of an open-ended scheme, unlike that of a close-ended scheme where it remains constant.
However, fund houses keep launching various Fixed Term Plans (FTPs) from time to time which are closed ended schemes but can be purchased directly from the fund house at the time of its NFO.
How is investing in a mutual fund different from depositing money in a bank?
When you deposit money with the bank, the bank promises to pay you a certain rate of interest for the period you specify. On the date of maturity, the bank is supposed to return the principal amount and interest to you. However, in a mutual fund, the money you invest, is in turn invested by the manager, on your behalf, as per the investment strategy specified for the scheme. The profit, if any, less expenses of the manager, is reflected in the NAV or distributed as income and is directly beneficial to you. Likewise, loss, if any, along with expenses, will be reflected in the NAV and borne by you. Mutual Funds also do not offer a guaranteed rate of return.
How are mutual funds different from portfolio management schemes?
Mutual Funds are subject to several investment restrictions and are highly regulated. The investments of investors are pooled to form a common corpus and the gain/loss to all investors. On the other hand in the case of a portfolio management scheme, the investment of a particular investor remains individual and unique to him. Here, the gain or loss of each investor will be different. Currently, mutual funds also enjoy certain tax privileges over portfolio schemes.
Do you have ECS (Electronic Clearing System) facility for the dividends?
Dividend is paid out via any of the following three modes depending on the investor’s bank, completeness & accuracy of the bank details provided by the investor & his location:
* RTGS/ NEFT: wherein complete core banking details along with IFSC code of the bank branch is available, we transfer the dividend proceeds via RTGS/ NEFT.
* ECS: For investors who have not provided the IFSC code or their bank is non-participative in RTGS/ NEFT but have provided us with 9 digit MICR code, we transfer the dividend proceeds via ECS.
* Dividend warrant/ cheques: Dividend warrants are sent to those investors who cannot avail of dividend via electronic mode.
Individuals, on their own behalf, singly or jointly can nominate. A unit holder can, at the time an application is made, or by subsequently writing to an ISCs, request for a nomination form in order to nominate not more than three individuals, to receive the units upon his/her death, subject to completion of the necessary formalities, e.g. proof of death of the unit holder, signature of the nominees, furnishing of proof of guardianship in case a nominee is a minor, execution of indemnity bond or such other document as may be required from the nominee(s) in favour of and to the satisfaction of the Mutual Fund, the AMC, or the Trustee.
If the units are held jointly, all joint unit holders will be required to sign the nomination form, even incase of ‘Either or Survivor’.
Investors shall indicate clearly the percentage of allocation/share in favour of each of the nominees against their names, and such allocation/share shall be in whole numbers without any decimals.
In the event of the investor not indicating the percentage of allocation/share for each of the nominees, the AMC shall settle the claim equally amongst all the nominees.
A minor can be nominated and in that event, the name and address of the guardian of the minor nominee shall be provided by the unit holder. Nomination can also be in favour of the Central Government, State Government, a local authority, any person designated by virtue of his office or a religious or charitable trust. The Nominee shall not be a trust, other than a religious or charitable trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family or a Power of Attorney holder. A non-resident Indian can be a Nominee subject to the exchange controls in force, from time to time.
Can I cancel / change my nomination?
Cancellation of nomination can be made only by those individuals who hold units on their own behalf, singly or jointly, and who made the original nomination. On cancellation, the nomination shall stand rescinded and the AMC/Mutual Fund shall not be under any obligation to transfer the units in favour of any of the nominees.
Transfer of units/payment to a nominee of the sums shall be valid and effectual against any demand made upon the Trust/AMC, and shall discharge the Trust/AMC of all liability towards the estate of the deceased unit holder and his/her successors and legal heirs, executors and administrators
Do I get any incentive if I apply through a distributor?
SEBI has strictly banned rebates/ gifts/ commissions to an investor either directly or indirectly. The only advantages of approaching a distributor include professional investment advice and personal service.
What are the benefits of investing in a mutual fund?
Some positives of investing in a mutual fund include:
* Money is managed by experienced and skilled professionals
* Diversification over a large number of companies and industries, thus reducing the element of risk.
* Liquidity, especially in an open-end fund.
* Costs of research and of investing directly in the individual securities are spread over a large corpus and thousands of investors.
* High degree of transparency in the operation of a mutual fund.
* Choice of schemes to suit your needs.
* Well-regulated industry with many measures oriented towards investor protection.
What are the risks involved in investing in a mutual fund?
Equity Funds are exposed to market risk i.e. there is a possibility that the price of the stocks in which the Fund has invested could decrease. Of course, the prices may also increase, making it possible for the fund to earn profits.
Debts Funds are exposed to two main risks:
Credit Risk
* The company in whose bonds the fund has invested could default on the payment of its interest or principal.
Interest Rate Risk
* The price of the bond in which the Fund has invested may decrease because of an increase in the interest rates. In general, it is useful to remember that this is a "see-saw" relationship - bond prices (and therefore, NAVs) increase when interest rates decrease and vice versa.
Please refer to the Scheme Information Document and Statement of Additional Information for a more comprehensive set of risks before considering investing in any scheme.
How are the mutual funds regulated?
The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare one with another. All mutual funds are required to register with SEBI, who regularly monitors their operations. Mutual funds are obliged to follow strict regulations designed to protect investors.
What is the difference between open-ended and closed-ended schemes?
Open-ended funds do not have a fixed maturity whereas closed-ended schemes have a stipulated maturity period. New investors can join an open-ended scheme by directly subscribing to the mutual fund at applicable NAV-related prices. However for close-ended schemes new investors can only purchase units from the secondary market. This results in the daily fluctuation of the unit capital of an open-ended scheme, unlike that of a close-ended scheme where it remains constant.
However, fund houses keep launching various Fixed Term Plans (FTPs) from time to time which are closed ended schemes but can be purchased directly from the fund house at the time of its NFO.
How is investing in a mutual fund different from depositing money in a bank?
When you deposit money with the bank, the bank promises to pay you a certain rate of interest for the period you specify. On the date of maturity, the bank is supposed to return the principal amount and interest to you. However, in a mutual fund, the money you invest, is in turn invested by the manager, on your behalf, as per the investment strategy specified for the scheme. The profit, if any, less expenses of the manager, is reflected in the NAV or distributed as income and is directly beneficial to you. Likewise, loss, if any, along with expenses, will be reflected in the NAV and borne by you. Mutual Funds also do not offer a guaranteed rate of return.
How are mutual funds different from portfolio management schemes?
Mutual Funds are subject to several investment restrictions and are highly regulated. The investments of investors are pooled to form a common corpus and the gain/loss to all investors. On the other hand in the case of a portfolio management scheme, the investment of a particular investor remains individual and unique to him. Here, the gain or loss of each investor will be different. Currently, mutual funds also enjoy certain tax privileges over portfolio schemes.
Do you have ECS (Electronic Clearing System) facility for the dividends?
Dividend is paid out via any of the following three modes depending on the investor’s bank, completeness & accuracy of the bank details provided by the investor & his location:
* RTGS/ NEFT: wherein complete core banking details along with IFSC code of the bank branch is available, we transfer the dividend proceeds via RTGS/ NEFT.
* ECS: For investors who have not provided the IFSC code or their bank is non-participative in RTGS/ NEFT but have provided us with 9 digit MICR code, we transfer the dividend proceeds via ECS.
* Dividend warrant/ cheques: Dividend warrants are sent to those investors who cannot avail of dividend via electronic mode.
