Indian investors are realizing the importance and benefits of investing in mutual funds. The popularity of mutual funds keeps growing. But investors are still negligent. This is particularly true when it comes to reading a fund statement. Here are 10 things you should know when you get a mutual fund statement.
1. Why should you read the fund statement?
First, you must know the reason and importance of reading the statement. Look at it as a bank statement. It gives you an overview of where you have invested your money. You can also study market movements and trends. This can help you make suitable decisions.
2. Note your folio number
Suppose you have invested with a mutual fund house. They will give you a unique reference number. This is your folio number. It will be the same for all your investments with a particular fund house. It makes tracking easier. Keep a record of your folio number for future communication.
3. Verify personal details
This section specifies your name, address, phone number, email id, and PAN. Check if all these details are correct. Are there any changes or corrections? If yes, notify the fund house and get them amended.
4. KYC and FATCA status
This is a small section in your fund statement. It mentions whether you have followed Know Your Customer (KYC) and Foreign Account Tax Compliant Act (FATCA) processes. Investments and processing is easier for KYC compliant investors. Indian investors must declare if they are US citizens under the FATCA law. This is according to an India-US treaty.
5. Confirm bank account details
Check your bank name, account number, and other relevant details. Any incorrect information can create problems when redeeming your mutual fund units. Cross-check details with the information on your bank cheque book or pass book.
6. Check transaction summary
In this section, you get a quick look at your transactions with the fund house. It specifies whether the fund was a one-time buy, a systematic investment plan (SIP), or a systematic withdrawal plan (SWP). The following statements list these transactions date-wise. They show the net asset value (NAV) and the number of bought units.
7. Pay attention to fund schemes
Mutual fund house has many schemes and sub-schemes. When reading your fund statement, confirm your fund name and option. Check if it is a growth or a dividend fund. Suppose there is a discrepancy in what you bought and what you got. Then, contact your fund house or agent to take necessary action.
8. Know the loads
The transaction summary mentions your mutual fund scheme’s entry and exit loads. Check for any changes in the previous and new load structure. Is there any increase in loads? This can impact the returns on your investment.
9. Check the current cost and market value
Current cost is the amount you invested to buy mutual fund units at the NAV. The market value is the worth of your investments on a given date. It gives you an idea whether the value of your investment has increased or reduced over time.
10. Do not forget the agent details
Suppose you have invested through an agent or advisor. Verify their name, PAN, and Employee Unique Identity Number (EUIN). Report any discrepancies and have them changed.