In today's ever increasing mutual fund market there is a scheme for everyone. Mutual funds have become a part of every individual's portfolio.
Despite this fact how many of you can confidently say the exact number of mutual fund units in your portfolio or at what NAV your money has been invested. Does your fund have entry or exit load ? What was the rate at which you got your monthly dividend?
All this is possible if you have a regular look at the mutual fund account statement that the fund houses mail to you periodically. Busy investors do not know how to read the statement.
Just the other day I got a frantic call from my elderly client who despite the fact has been investing in mutual funds since the US64 days but still was not sure as to how to check the current status of his investments by looking at the statement.
The list of such investors would go on and hence here is a small guide to understand your fund account statement.
A mutual fund statement is just like your bank account statement. It is a complete summary of your investments. It is generated within 4 to 5 days of your investment in a particular scheme and received by you within 7 to 10 working days.
So for any delay more than the stated period you have to contact your broker or the fund house.
To understand the statement we need to break it into parts starting with:
- Customer folio: This is mentioned on the top of the statement. Just like your bank account number this is the fund account number, which is also your reference number. For any correspondence the folio number is a must and hence besides maintaining a record of the statements it is also important to make a note of the folio number. Funds like Franklin Templeton allot an account number, which is unique for all investments even if the folio number is the same.
- Personal details: Like the name, address, and phone numbers of the first holder. Also, stated are the names of the second and third holder and PAN card details of all.
- Other details: Like status, holding type and branch details.
Statement date is the date on which the fund house issues the statement as requested by the investor. For the period states the period for which the statement is issued. Say from 1 st January 2006 to 31st December 2006.
Please make sure that the personal details as mentioned on the statement are as per the data submitted by you. If there are any discrepancies immediately inform the fund house and get it rectified.
Now to the main body of the statement. Here you can get all the information of your transaction/s.
| ABC Fund | ||||||
| Date | Transaction Type | Amount | NAV | Price | Units | Unit Balance |
| 28/04/06 | Dividend Payout @ Rs0.14032016 | Rs 140.32 | 0 | 0 | 0 | Rs 1,000 |
| 20/01/07 | Systematic Purchase � installment 1/12 | Rs 5,000 | Rs 10 | Rs 10.225 | 488.99 | Rs 1,488.99 |
| 28/02/07 | Switch out To xyz fund � installment 2/12 | Rs -5,000 | Rs 10 | Rs 10 | 500 | Rs 1,000 |
| 28/02/07 | Switch in from ABC fund | Rs 5,000 | Rs 10 | Rs 10.225 | 488.99 | Rs 2,488.99 |
| 25/03/07 | Purchase | Rs 10,000 | Rs 10 | Rs 10 | Rs 1,000 | Rs 1,000 |
| 7/3/2007 | Dividend Reinvest. @ Rs 0.14032016 | Rs 140.32 | Rs 10 | Rs 10 | Rs 14.032 | Rs 1,014.032 |
| 10/4/2007 | Redemption | Rs 50,000 | Rs 10 | Rs 10 | Rs 5,000 | 0 |
These are some of the mutual fund transactions that you may generally see on your statement. Interpretation of this part is where most of the investors get stuck. Let us have a look in more detail.
- Fund name is mentioned along with the option you have opted like growth, dividend payout or reinvestment.
- Dates on which transaction takes place.
- Transaction type states the type of transaction you have opted for like purchase, systematic investment (SIP) along with the number of the installment or transfer (STP) or withdrawal (SWP) or switch.
Transactions like dividend payout or reinvestment is mentioned along with percentage or rupees per unit at which the dividend will be re-invested or paid out. Say dividend payout @ Rs 0.14032016 means dividend will be paid at Rs 0.14032016 per unit.
Similarly, dividend reinvestment @ Rs 0.14032016 means dividend will be reinvested at Rs 0.14032016 per unit. As for STP the fund name will be mentioned to which you are transferring your investments. If your account is an old one and you have asked for a statement only for a particular period it will give opening balance which states your balance of units as on that date.
- Amount refers to the amount, which you have invested, transferred or withdrawn or the dividend amount being paid or reinvested.
- NAV means the Net Asset Value or the per unit price.
- Price is the actual price at which your amount gets invested or redeemed.
The sum of entry load and the NAV is the price at which your money will be invested. Or if you are redeeming your funds exit load will be deducted from the NAV, which is the price at which your units will be redeemed.
Say if you have opted for an SIP then it has a load of 2.25 per cent every month. Now if you assume the NAV as Rs 10 then 2.25 per cent of Rs 10 will be added and the price will be Rs 10.225. So for Rs 5,000 invested you will get 488.99 units allotted.
But not all funds have entry or exit load. In such a case whatever will be the NAV will be the price and your amount will get invested at NAV.
- Units refer to the number of units allotted or redeemed.
- Unit balance shows the number of units accumulated as on a particular date.
Say in the above example in dividend reinvestment option 14.032 units are allotted. They are added to your outstanding units and the unit balance as on 7th March 2007 would be 1,014.032.
If you'd opted for an STP from one fund then units are deducted from that particular fund based on the price resulting in an ongoing reduction in the unit balance. As for the fund to which you are transferring, unit balance will keep increasing. As for dividend payout your unit balance will remain same as initial purchase.
After the above particulars comes the summary of the account where at a glance you can have all the details of the account:
- NAV as on a particular date
- Current cost (inclusive of dividend reinvestment) means total investment plus any dividend reinvested by the fund house.
- Current value shows the current value of investment on that particular date, which is equal to unit balance * NAV on that particular day.
- Dividend earned (inclusive of dividend reinvestment) shows the total dividend earned by way of payout or reinvestment.
- Load structure gives the entry and exit load of the fund.
- Agent / Broker code & name gives the details of the agent or broker. If there is more than one broker then it will just show 'Multiple brokers'.
- Bank details as submitted.
- Mode of payment as opted for dividend payout or redemption.
A quick glance of the status of the investment can be obtained from the summary of the investments given below the summary of the account.
At the bottom of the statement is the transaction slip for additional purchase or change of address or change of bank details or other request like redemption or switch.
This guide can be best be understood if read along with an account statement by the side.
