Mutual Funds

Funds impose a fee when you leave the scheme, i.e., redeem your units, called the exit load. Different schemes and categories of Mutual Fund have different terms for exit load, you can refer scheme documents before investments.

Some Mutual Funds provide investor with an option to shift his investment from one scheme to another within that fund this option is known as switching.

Investors can opt to switch units between Dividend Plan and Growth Plan at NAV based prices. Switching is also allowed into/from open-ended schemes currently within the Fund family or schemes that may be launched in the future at NAV based prices.

While switching between Debt and Equity Schemes, one has to take care of exit and entry loads. Switching from a Debt Scheme to Equity scheme involves an entry load while the vice versa does not involve an entry load.

Switches are subject to loads depending upon the Scheme details.

The unit holder may set up a Systematic Withdrawal Plan on a monthly, quarterly or semi-annual or annual basis to redeem a fixed number of units. They have to pay capital gain tax, which may be short term or long term. Any Unit holder can avail of this facility subject to the terms and conditions contained in the application form / Offer Document, it may also include exit loads if applicable.

Investors can apply investment in Mutual Fund in Two Way;

• Offline
• Online

Apply Offline/ in Physical way:

• Obtain an application form from your investment advisor / broker / agents. Else you can download it from our website or procure it from any of offices or investor service centres for different type of Transaction.
• Read and understand the Offer Document and complete the application form.
• Attach a cheque for the amount you would like to invest. You can also transfer the money electronically/online from your bank account and mention transaction ID in Application form.
• Submit Filled & completed Application Form with Cheque in at any of CONCEPT Office or branch or AMC offices. You will receive acknowledgement in electronic or physical form.

Apply Online:

To know the procedure, click here.

The applications can be obtained from your Advisor/ Online/AMC offices or branches. Alternatively, they can be downloaded from the Website of the funds houses.

Those who indicate "Individual" in the "Status" division of the application form

The application complete in all respects Those who indicate "Corporate" in the "Status" division of the application form

• Certified copy of Memorandum of Association/ Articles of Association
• Board Resolution authorizing the company to invest in mutual funds
• List of authorized signatories with specimen signatures
• KYC Documents of Directors/Authorized Signatories
• Other Documents required as per KYC Norms

Those who indicate "Trust" in the "Status" division of the application form

• Trust Deed
• List of authorized signatories with specimen signatures
• Board Committee Resolution
• KYC Documents of Trustees/Authorized Signatories
• Other Documents required as per KYC Norms

Those who indicate "Trust" in the "Status" division of the application form

• Trust Deed
• List of authorized signatories with specimen signatures
• Board Committee Resolution
• KYC Documents of Trustees/Authorized Signatories
• Other Documents required as per KYC Norms

Those who indicate "Societies" in the "Status" division of the application form

• Board Committee Resolution
• List of authorized signatories with specimen signatures
• KYC Documents of Authorized Signatories
• Other Documents required as per KYC Norms

Those who indicate "Partnership Firms" in the "Status" division of the application form

• Board Committee Resolution, Partnership Deed
• List of authorized signatories with specimen signatures
• KYC Documents of Partners
• Other Documents required as per KYC Norms

The Application can be mailed to or dropped off at any of offices of AMC or investor service centres, like CAMS/KARVY/Franklin/Sundaram.

Yes, limits of minimum amount are applicable for additional purchases for schemes and will be mentioned in the Offer Document.

Yes, you can switch between schemes/investment options/plans. You need to complete a transaction slip, which you can download from website or detach from the bottom of your account statement.

A switch from one scheme to the other is treated as redemption from the scheme from where it is switched out & a purchase into the scheme into which it is being switched. Thus you will be liable for any 'applicable' entry load, exit load.

Lock-in period is a time span during which the money invested cannot be redeemed. In the case of open-ended funds there are no lock in periods, however in the case of tax saving funds a minimum lock-in period of 3 years is applicable.

Please refer offer documents for Lock-In period for different schemes of Mutual Fund.

Yes, the target scheme will have the minimum subscription amount as specified in the Offer Document.

Yes, the target scheme will have the minimum subscription amount as specified in the Offer Document.

Switch requests are affected the day the request for switch is received. The Applicable NAV for the switch will be the NAV on the day that the request for switch is received

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. Nomination is highly recommended, specifically in SINGLE mode of holding.

Parents / Lawful Guardians can apply on behalf of a Minor. They can sign the application on behalf of the Minor and status of the Investor in the Account Statement would also reflect the same.

Yes, investments can be made in joint names.

Apart from Sole/First Applicant, two more holders are permissible, so total 3 joint holders investors can opt.

When an investment is made joint mode of holding it means the units are in both the names and transactions needs signature of both.

On the other hand when one opts for either or Survivor it means the units are in both the names but transaction can be carried out by either the individuals. And in case if one of them is dead, the transaction is not stopped. But in the case of joint holding the living individual have to submit the dead certificate along with the application to the AMC.

Usually, either or survivor is preferred option by investors.

Yes, there is cut-off time before which investor should submit the transaction so that he can take the advantage of that day's NAV.

The cut off time for purchase transactions for all mutual fund schemes other than liquid fund schemes is 3:00 p.m. This means that if you have invested till 3:00 p.m. on a particular day, you will get that day's NAV.

A mutual fund may accept applications even after the cut-off time, but you will get the NAV of the next business day. Further, the cut-off time rules apply for redemptions too.

Yes, PAN is mandatory for Mutual Fund transactions.

Investment Objective: Mutual Fund scheme selection should be based on your investment objective. For example, if you are seeking a mutual fund that provides steady income, a small cap equity fund, which will probably leave you disappointed.

Performance against Benchmark: A fund is judged to be a good performer if it manages to beat its benchmark.

Consistency: It is also a good idea to scrutinize the performance of a fund over many years and look for consistency in returns.

Peer Comparison: Comparing a mutual fund to its peers gives a better sense about relative performance and fees.

Fund Manager: Look at the experience that the Fund Manager has, other schemes that the fund manager is managing and so on. This increase the reliability and confidence that your hard-earned money is in safe hands.

Portfolio Turnover Ratio & Expense Ratio: Higher turnover ratio would attract higher transaction charges. This, in turn, reduced your net returns from the investments.

Mutual funds invest across different financial assets such as equity, debt, bonds, commodities, government securities, etc. Hence, the investments are exposed to different risks. The equity portion of the scheme witnesses market, liquidity, volatility, concentration risks, etc. At the same time, the debt portion comes with interest rate risk, inflation risk, credit risk, etc.

Types of Risk in Mutual Funds:

Market Risk: Market risk is simply the possibility that the market or the economy will decline, causing individual investments to lose value regardless of the performance.

Inflation Risk: It’s the risk of losing the purchasing power. In simple terms, if your mutual funds earn 5% per year and the cost of living goes up by 2%, you are just left with 3% as net returns from your investments. You should always invest in schemes that generate inflation-beating returns.

Concentration Risk: Concentration generally means focusing on one thing. Concentrating a considerable amount of a person’s investment in one particular scheme is not a good option. Profits will be huge if lucky, but the losses will be more. Concentrating and investing heavily in one sector is also very risky.

Interest Rate Risk: This type of risk is majorly related to debt mutual funds. It deals with the risk of rising interest rates and their effects on bond prices. The commonly known inverse relation between bond prices and interest rates plays a major part here as rising interest rates cause bond prices to fall, thus reducing the capital gains created.

Liquidity Risk: Liquidity risk refers to the difficulty to redeem an investment without incurring a loss in the value of the instrument. It can also occur when a seller is unable to find a buyer for the security. In mutual funds, like ELSS, the lock-in period may result in liquidity risks. Nothing can be done during the lock-in period. In yet another case, Exchange traded Funds (ETFs) might suffer from liquidity risks. As you may know, ETFs can be bought and sold on the stock exchanges like shares. Sometimes, due to lack of buyers in the market, you might be unable to redeem your investments when you need them the most.

Credit Risk: Credit risk means that the issuer of the scheme is unable to pay what was promised as interest. If a bond issuer cannot repay a bond, it may end up being a worthless investment. Within mutual funds it’s the debt categories, which directly suffer from credit risks as the fund manager might invest in instruments with lower credit ratings in order to generate superior returns.

Country Risk: It’s the risk due to the changes in the foreign economy where the fund has invested. Certain statutory changes or economic instability in the foreign country would affect the returns of the fund. This risk mainly affects overseas funds.

Let's be quite clear that there's no wrong or right answer to this. The matter is entirely subjective.

Knowledge & Experience: If you possess the required knowledge and experience, direct stock investment can work wonders for you. On the other hand , mutual funds work well for passive investors who have the paucity of time and the required experience to navigate market movements. Mutual Funds are professionally managed with a Fund Management team that does a lot of research on stocks, sectors, and the economy.

Diversification: A well-diversified portfolio should include at least 15 to 20 stocks but that might be a huge investment for an individual investor. With mutual funds, investors with little funds, as low as INR 1000, can get access to a diversified portfolio. Buying units of a fund allows you to invest in multiple stocks without the need to invest a huge amount.

Investment Decision: You have full control over the investment decision when you invest in stocks. In case of mutual funds, you do not have the freedom to choose or transact in stocks or any assets. The fund manager does all the investment, tracking and management on your behalf.

Investing / Trading time: Stock can be bought at any time during the exchange trading hours during which the transactions happen at the existing price. In case of mutual funds, they can be bought or sold only once and at the day’s end after the NAV is finalized.

Suitability: Direct stock investments are meant for those who understand it well and are ready to take the required risks. Mutual fund investments usually suit all kinds of investors, even those with a low-risk appetite. You may choose the type of mutual fund scheme(s) that are aligned with your financial and diversification goals.

Minimum Investment Amount: PMS has a minimum investment requirement of Rs. 50 Lakhs whereas a Mutual Fund SIP can start from as low as Rs. 100.

Fee Structure: Mutual funds have a fixed fee structure. Portfolio management service providers will offer you more than one option with the same fee structure.

Demat Account: For mutual funds, an investor doesn’t require demat account whereas for PMS, demat account is must.

Transparency: Under PMS, an investor can view every trade, brokerage and price of execution. He can get information about the expenses incurred for managing the portfolio.

However, mutual fund does not disclose all the expense-related details. Everything in mutual funds depends on Net Asset Value and its reporting.

Taxation: All the transactions that the fund manger does - whether he buys or sells any stock, are not liable to taxes. It doesn't affect your tax liability. You are liable to capital gains tax only when you actually redeem your money invested in the fund. But in the case of PMS, all transactions by the fund manager will be treated as your own transaction and will be liable to capital gains tax.

Accounts: Mutual funds use pooled accounts for maintaining the securities and funds, whereas a Portfolio Management Service uses a separate Demat account and bank account for each client.

Flexibility: With mutual funds, the fund manager can only invest in the asset categories defined by the scheme’s objective. For instance, equity mutual fund schemes can only invest in equity.

But with PMS, there are no such restrictions. Your portfolio manager can create a portfolio comprising equity, debt, commodity, etc. This can make it easier for you to create a diversified portfolio.

Suitability: PMS is most suited for affluent investors with a high net worth. Mutual funds are more suitable for general (Retail) investors.

Investments: Equity funds invest primarily in shares of companies and related securities like derivatives (i.e. futures, options) which trade in the stock market.

A debt fund, on the other hand, invests in fixed-income securities such as government securities, corporate bonds, certificate deposits and other money market instruments.

Risk: In the equity fund carries a higher risk than that of debt fund. Since equity funds are directly related to market fluctuations. They carry higher risk.

Return on Investment: Equity funds have the potential to deliver relatively higher returns compared to debt funds in the long term.

Suitability: Equity funds are for long term and suitable to investors with moderately high to high risk appetite. Equity funds may help reach your long term financial goals

Debt funds give you investment option from 1 day to many years with lower to moderate risk. It can be used as alternate to fixed deposits and savings bank account.

Taxability: When it comes to equity funds, there are short term gains (less than 12 months), it is taxed at 15%. However, if there is LTCG, there is an exemption up to INR 100000 and the rest is taxed at 10%.

In the case of debt funds , STCG (held less than 36 months) are taxed as per income tax slab, whereas LTCG is taxed at 20% with indexation after three years.

Tax Benefits: ELSS (Equity) mutual funds allow tax savings by investing up to Rs 150,000 in a year. On the contrary, debt Funds do not give an option to save taxes u/s 80C.

Equity is a highly volatile asset class. Hence there is no surety of returns. But yes, investors should go through the process of investment or philosophy rather than focusing on returns. If the process is right then over a period of time you can expect good returns over other asset classes. It helps to defeat inflation over a period of time and help us to generate real returns.

It invests directly in equity shares as per the objective of the plan. It might be highly concentrated and tailor-made. In PMS, the portfolios of each investor may differ as per their preferences and risk profiles. There are three types of PMS services.

• Discretionary: All investment decisions are taken by the fund manager without prior approval of investors as POA has been given to portfolio managers.
• Non-Discretionary: Here, the Portfolio manager suggests investment ideas to investors and after confirmation from the clients it has been executed by the fund manager.
• Advisory: The portfolio manager only suggests investment ideas and the rest of the things are taken care of by investors.

Yes. Because all the securities bought by the fund manager on behalf of investors are credited to respective clients' Demat accounts.

It depends upon the client's risk-taking ability. In general, 15-25 stocks are ideal to have.

• Fill up a single SIP form only. (If you are applying first time in any AMC or want to create new folio, fill Common Application Form and a single application form.)
• Attach Cheque same as SIP amount. (You can submit cancel cheque, in case you do not want First order). For Online SIP application, they can use Biller desk facility or mandate facility.
  Refer minimum SIP amount for respective schemes. There are many funds that have their minimum amount as low as can be as low as Rs 500/-
• After successful application, SIP amount will auto Debit from your bank account on selected date.

Yes, there is a minimum amount limits for subsequent purchase in same scheme. You can refer Fund offer document for minimum purchase amount.

A document issued by the mutual fund, which gives details of their transactions and holdings of an investor.

Yes, you can get email communication instead of the physical communication of the following:

Account Statement, Quarterly Newsletter, Annual Report, Communication on change of Address, Bank, etc. You need to provide your email id and subscribe for the above at the time of investing by ticking at the relevant column of the application form / common transaction form.

Yes, you can consolidate multiple accounts in a fund. The pre-requisite for consolidation is that all static details like Scheme details, Address, Bank, Mode of Holding, Unit holders, Nomination details etc. have to be identical across all accounts in a fund. Upon receipt of a valid request, consolidation into a single account would take place.

You have to inform your Financial Advisor office or concerned AMC in writing, appropriately signed and self attested address proof copy to modify KYC.

You have to inform your Financial Advisor office or concerned AMC in writing, appropriately signed and self attested cancel cheque leaf of new bank. Additionally, you need to submit self attested copy of old bank proof. In case, you do not have old bank proof, you need to submit bank letter stating account closure for your account number.

Your dividend will be credit directly to your bank registered in the Mutual Fund Folio as and when declared by Fund house. If you are not receiving it in your bank, please contact your Financial Advisor or AMC or its branch to update bank records.

It is combination feature of both growth and dividend plan. Dividends are declared as in a dividend plan. But are not received instead are reinvested in the scheme No, there is no load on re-investment of dividends into the same fund. In a dividend reinvestment plan, the dividend is reinvested in the scheme itself. Hence instead of receiving dividend, the unit holders receive units. Thus units would be allotted under the dividend reinvestment. On receiving Dividend, you will incur Dividend Distribution Tax at 10% prescribed in Union Budget 2018-19.

You need to claim your dividend through Unclaimed Dividend Form with self Attested cancel cheque leaf in which you want Dividend onwards. For that you need to visit your Financial Advisor or visit nearest AMC office.

In an open ended fund investments can be redeemed any time but in the close ended fund investments can be redeemed only after the expiry of the lock-in period, either by submitting a physical request to your Financial Advisor/ concerned AMC or requesting the same through the on-line services available under Investors section at the CAMS website.

Redemption process is depending upon the scheme type. Kindly, contact your Financial Advisor or respected AMC for more information.

You can write / email to your Financial Advisor or to the AMC concerned addressing the same for further course of action.

Equity and Debt are mainly two bifurcation considered in Mutual Funds. As per latest applicable Taxation 2019-20, you can find in below table.

Investors can get rebate from tax under section 80 (C) of Income Tax Act, 1961 by investing in Equity Linked Saving Schemes of mutual funds up to 1,50,000/-

These are funds that invest in shares of companies (diversified equity funds and sector funds). They also include balanced funds, which have more than 65% of their total investments in equity. Dividend income from an equity-oriented fund is tax-free in hands of investors.

If you sell the units within a year of buying, it will attract a short-term capital gains tax in equity and debt as per above table mentioned.

If you sell the units after a year, 10% long-term capital gains tax on gain over Rs. 1,00,000 p.a. in equity oriented Mutual Funds. In Debt Mutual Fund, 20% after Indexation benefit.

If you sell the units within 3 years, the short-term capital gain will be clubbed with the income of the individual investor, will be taxed as per income tax rules.