Mutual fund fact sheets are the treasure house for the investors to get updated information about their mutual fund scheme. Most of the fund houses publish the fund fact sheets every month, and the investors can access these on the website of the mutual fund houses.
Retail investors have continued with their investments in mutual funds through Systematic Investment Plans (SIPs) with monthly SIP inflows in March 2020, hitting an all-time high of more than Rs. 8,600 crores.
Source - AMFI
However, with the ongoing volatility coupled with the impact on the regular income and cash flows, many investors are considering discontinuation of their SIPs.
All mutual funds houses undertake KYC (Know Your Customer) compliance in pursuance of the Prevention of Money Laundering Act, 2002, and SEBI (Securities & Exchange Board of India) guidelines. This process is made mandatory by the market regulator so that the transactions are seamlessly linked to the investor. Since PAN is the compulsory document towards Proof of Identity, it serves as a unique link for the stakeholders concerning all the transactions in the financial markets, be it with stockbrokers, depository participants or mutual funds, etc.
A Corporate Bond Fund is an open-ended debt scheme predominantly investing in AA+ and above rated corporate bonds. Minimum investment in corporate bonds – 80% of total assets (only in AA+ and above rated corporate bonds. Corporate Bonds are one of the predominant sources of funds for the companies willing to borrow from the market, apart from the borrowings from banks and financial institutions.
In mutual fund transactions, the time of receipt of the transaction and money affects the applicable Net Asset Value (NAV). To bring uniformity in the operational processes, SEBI (Securities & Exchange Board of India) has prescribed the cut-off timings for mutual fund transactions across all the mutual fund houses. Therefore, mutual fund transactions are processed based on the prevailing NAV of the respective scheme, if the fund house receives the transaction/ funds before the cut-off time.
Investors may choose to invest in equity markets through two primary investment strategies: active and passive. Active investing refers to the active selection of stocks in the portfolio depending on company fundamentals and other parameters. In contrast, passive investing refers to tracking a benchmark index and replicating its composition in the portfolio. When a scheme is actively managed, the fund manager decides which stock to invest and in what proportion to invest.
It is a known fact that the purchasing power of money reduces over time. An Rs. 2000 note today will fetch lower value a year later and further lower a decade later. Similarly, a Rs. 100 item will most likely not be available at the same rate a year later and available at much higher rates 10 years later. This happens due to the increase in prices of raw materials, input services etc. In normal parlance, this is referred to as inflation, which reflects the increase in prices of commodities and services across different periods.
Gold is regarded as a natural hedge against inflation and currency depreciation. Moreover, the recent volatility in the global financial markets has brought the focus back to the yellow metal as an investment option. As such, gold is generally considered to add stability to an investment portfolio, which is useful during times of market volatility.
New Fund Offer(NFO) refers to the new mutual fund schemes being offered to the investors. This is akin to Initial Public Offering (IPO) made by the unlisted companies for their equity shares, wherein the companies offer shares to the public for the first time. NFOs aim to attract household savings by offering new mutual fund schemes to the investors.
Debt funds provide an excellent alternate investment option for investors for traditional investment products. The debt funds may be categorised based on their investment strategies and/or the issuer companies wherein such funds are invested.
