Are You Organised While Holding Mutual Funds?
Very often convinced by the narrative from mutual fund distributors / agents / relationship managers many of you buy into various mutual fund schemes. But while you do so; are you being organised in your approach?
It has been observed that host of naive investors hold multiple folios while they invest in mutual funds. This often adds up to the muddle, as creation of multiple folios makes it difficult to keep records of investments done and simply adds up to the paper work. Just as you may be organised in your approach in your banking transaction, you need to be organised while holding mutual funds as well.
So here are couple of points which can help you be a little more organised...
PersonalFN is of the view that, if you have not yet opted for consolidated folios, you may consider doing it now. It makes it easy to keep a track of your investments. Periodic review of your portfolio is important as it helps you assess the performance of your investments. PersonalFN also believes that you should quote the same bank account number for simplicity purpose. Nominee should ideally be younger than you and could be the same across all investments, if possible. Such a practice would not only help you consolidate most of your folios but would also help you manage your investments better. Remember, it is vital for you as investors to be responsible and cognisant about your investment in mutual fund schemes.
- Well, in the first place you shouldn't be creating separate folios at all. So for example, when you are investing in same tax saving fund every year or for that matter even any other type of mutual fund scheme from the same fund house, you shouldn't be creating a separate folio every time. On the contrary, you should always quote the same folio each time you invest in the same fund. It can make things simple for you. After all we don't like maintaining volumes of records unnecessarily, isn't it?
- In case you holding multiple folios, you may opt to consolidate your folios by following the procedure. This can be done provided that holding pattern, mode of holding, address, tax status and nominee details are same across all folios. For instance, if you hold a fund only in your name; you can't merge the folio with the one held by you jointly with your spouse. Moreover, folios where you are the first holder and your spouse is second holder can't be merged with a folio where your spouse is the first holder and you are the second holder. Similarly, if you have appointed two different persons as nominee for two different funds of the same fund house; you can't consolidate such investments under one folio. Once you identify similar folios, you need to fill in folio consolidation form provided by the Asset Management Company (AMC). The form consists of basic information such as name of all unit holders, contact details, PAN Numbers and email address. You need to mention all folio numbers you want to consolidate along with the one under which all folios will be merged. The folio in which other folios are merged is commonly called a target folio. It should be from within folios you hold with an AMC. It should be noted that folios where there is a lien or pledge cannot be merged as it requires the consent of the financer.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
More Views on News
Mar 10, 2016
An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.
Feb 29, 2016
Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.
Feb 12, 2016
PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.
Feb 2, 2016
Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.
Feb 1, 2016
Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.
More Views on News
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 10, 2017
Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?
Aug 16, 2017
Ensure your financial Independence, and pledge to start the journey towards financial freedom today!