Most of us seldom read them properly, but understanding the details can come in handy
It is that time of the month when most of us receive our mutual fund (MF) statements. If it is through a distributor, we would be lucky to get a consolidated statement mentioning all our holdings in different schemes. Otherwise, each fund house sends a separate statement that we need to decode and file separately for tax purposes.
But majority of us seldom read it properly, except perhaps to look at the rise in the value of investments. These statements contain some important details that come in handy. An important part of the statement is the name and address of the nearest investor service centre. But most investors are ignorant of these and complain that they have no recourse nearby when there is a problem.
Since there is a buy and, if redeemed, sell transaction, MF statements are often easier to understand. The statement has three sections — personal, fund details and account summary, which tells you the current value of your investment.
Personal section
This contains basic information about the investor, including bank account details and the mode of holding. Providing a PAN card number and being KYC- (know your customer) compliant is mandatory if investments cross Rs 50,000.
Other crucial information include the 'customer folio number', which is your unique fund account number. You could have the same folio number for schemes purchased from the same fund house if you mention your folio number in your application forms. Another important information is the address of the nearest investor service centre in your city.
Main section
The fund name and the options (growth or dividend) chosen by the investor are mentioned here. Besides the opening balance of the number of units, you get other details like:
Net asset value (NAV): This is the per unit price of the fund. Your statement will give you the per unit price of the date a particular transaction took place. The last declared NAV is also mentioned on the date when the statement was generated.
Amount: Refers to the amount invested, transferred or withdrawn, or the dividend amount being paid or reinvested.
Price: Refers to the actual price at which your amount got invested or redeemed.
Units and balance units: Refers to the number of units allotted or redeemed and that held by you after the transaction.
Dividend options: You have the option of earning a dividend payout or reinvesting the amount back into the scheme. The rate at which the dividend will be re-invested or paid out is mentioned in percentage or rupees per unit.
Last transacted broker code & name: If purchased through a bank, its code is mentioned, or it reads as 'direct' if funds were purchased online.
The transaction type column: Records the various transactions along with the date. These could read as the following:
Purchase: Whether through cheque or online transfer.
SIP investments: Total number of instalments left is also mentioned by a few fund houses.
Switches in and out: When you direct money from another fund into the current one, it's called a switch-in. When the money from your current fund is directed to another fund, it's aswitch-out. The switches can only be exercised between funds of the same fund house.
Redemption: Booking profits in-part or whole records as a redemption.
Systematic transfer plan: Investing funds from one plan to another (for instance, debt to an equity fund) belonging to the same fund house.
Systematic withdrawal plan: The fund house withdraws a fixed amount from the investor's investment kitty and transfers it to his bank account.
Trigger option: A target figure is identified (mainly the profits of a scheme), and the fund house is instructed to invest it into another of its schemes.
