DOS
Read the offer document carefully before investing.
Note that investments in Mutual Funds may be risky.
Mention your bank account number in the application form.
Invest in a scheme depending upon your investment objective and risk
appetite.
Note that Net Asset Value of a scheme is subject to change depending
upon market conditions.
Insist for a copy of the offer document/key information memorandum
before investing.
Note that past performance of a scheme is not indicative of future
performance.
Past performance of a scheme may or may not be sustained in future.
Keep track of the Net Asset Value of a scheme, where you have
invested, on a regular basis.
Ensure that you receive an account statement for the money that you
have invested.
Update yourself on the performance of the scheme on a regular basis.
Peruse the annual reports and half yearly financial results of mutual
funds. These are published in national newspapers and on websites of
mutual funds.
Find out about entry load & exit load in case of open-ended schemes
and check for initial expenses & exit load in case of close-ended
schemes. Actual expenses for each scheme are disclosed in half yearly
results.
Find out about the investment profile provided in portfolio disclosures
which is available on half yearly basis.
With assistance from sources of information like Scheme Offer
documents, Key Information Memorandum, Statement of accounts,
Annual and half yearly reports, portfolio disclosures etc., you are
recommended to take informed investment decisions, not based on
hearsay.
Waiver of Entry Load is provided for Direct Applications. For investors
wanting to make Applications for mutual fund schemes without a
distributor/broker, should cut across the section on ‘Distributor
information’ in application form, mark it as ‘Direct application’ and
countersign. The waiver of Entry Load for Direct Applications is
available for new applications and for switch-ins from one scheme to
another.
If an investor is seeking the help of a distributor, find out the value
added services that is provided by distributor in respect of investments
in mutual fund schemes.
Please verify that no entry/exit load is charged to you for bonus units
issued, if any, and in lieu of units allotted on reinvestment of Dividend.
The offer documents for mutual Fund Schemes are now bifurcated as
‘Scheme Information Document (SID)’ and ‘Statement of Additional
Information(SAI)’. Each scheme has a SID whereas SAI is common for
all schemes. While making investment decisions, you, as investor, are
expected to peruse the SID and SAI besides the existing Key
Information Memorandum (KIM).
Take care to mention nominee/nominees in your application forms.
Complete KYC requirements as per instructions on application form.
DON‘TS
Do not invest in a scheme just because somebody is offering you a
commission or other incentive, gifts etc.
Do not get carried away by the name of the scheme/Mutual Fund.
Do not fall prey to promises of unrealistic returns.
Do not forget to take note of risks involved in the investment.
Do not hesitate to approach concerned persons and then the
appropriate authorities for any problem.
Do not deal with any agent/broker dealer who is not registered with
Association of Mutual Funds in India (AMFI).
Avoid herd mentality while buying / selling into mutual fund schemes.
Don’t leave out KYC details in your application forms. That will make
the forms liable for rejection.
Don’t rush into making investments that do not match your risk taking
appetite and investment goals.
Investors should be wary of concentrating their mutual fund portfolio in
one particular asset class and not diversifying across various types of
scheme profiles.
CAclubindia
