What are the rights that are available to a Mutual Fund holder?
As per SEBI Regulations on Mutual Funds, an investor is entitled to
1. Receive Unit certificates or statements of accounts confirming your title within 6 weeks from the date your request for a unit certificate is received by the Mutual Fund.
2. Receive information about the investment policies, investment objectives, financial position and general affairs of the scheme;
3. Receive dividend within 42 days of their declaration and receive the redemption or repurchase proceeds within 10 days from the date of redemption or repurchase
4. The trustees shall be bound to make such disclosures to the unit holders as are essential in order to keep them informed about any information which may have an adverse bearing on their investments.
5. 75% of the unit holders with the prior approval of SEBI can terminate the AMC of the fund.
6. 75% of the unit holders can pass a resolution to wind-up the scheme.
7. An investor can send complaints to SEBI, who will take up the matter with the concerned Mutual Funds and follow up with them till they are resolved.
It is very often said that Mutual Funds have performed badly. Please explain?
The performance of Mutual Funds is evaluated on the basis of absolute increase or decrease in its Net Asset Value (NAV). However a fund's performance should be evaluated on the basis of a comparison with the relevant indices and alternative instruments. The NAV varies from fund to fund. Therefore this argument is not entirely true. However some funds have performed poorly with their NAV quoting well below their original IPO price.
Can I purchase after the time which is displayed beside the scheme?
In order to get the NAV of the same day, you can purchase up to the cut-off time of the scheme, after which you will get the next day's NAV. (If the next day is a holiday, then the NAV of the next working day
Will TDS be deducted on the redemption of units? If yes what will be the basis of deduction of TDSTDS is not deducted on the sale proceeds for Resident Indians.
In case of NRI's, TDS will be deducted on the sale proceeds. The TDS will deducted depending upon whether it is a short-term capital gain or long term capital gains. For short term capital gain the tax is deducted @ 33% while in case of long term capital gains it is deducted @ 11%
What is Entry Load on Mutual Fund Applications?
On every purchase of mutual fund units, the Asset Management Company (AMC) charges an entry load from the customer.
The entry load is reduced from the total amount paid and units for the remaining amount are allotted to the investors.
For example:
If Investment is Rs 100
And Entry Load is 2%
Net Amount for investment will be Rs. 98. (100- 2% of 100)
If current NAV is Rupees 10
Units allotted will be 9.8 (98/10)