When a fund is launched for the first time, you can buy its units at face value plus applicable load, if any, through the new fund offer (NFO), which is for a stipulated period of time.

After the NFO period, the fund is not available for buying /selling till it reopens, generally, within a month. Once the scheme reopens for regular trading you can buy units at the prevailing NAV by filling a fresh application form.

It should not matter when you invest as long as the fund’s objective matches yours. In an existing scheme you have the advantage of knowing the fund’s performance.

Although, the principle rule is to buy low and sell high, do not try to time the market. However, if you have to time your buying, opt for triggers. A trigger sets off your buying when the NAV comes down to level specified by you.

Check whether the fund’s objectives match yours. (Refer Table 2, page 19). Go through the fact sheet to check its performance, Also check expense ratios and the load structures. High expense ratios and load structures eat away your returns.

Mutual funds cater to investors with different investment horizons. Based on your need you can determine the time for which you want to stay invested. Generally, investments over a longer period of time may reap good returns.

You can approach the mutual fund or any of its investor service centres. Alternately, you can also route your investments through intermediates (agents, banks, certified financial planners and share markets for close-ended schemes).Nowadays, you can also transact on the internet.

The application form contains columns to fill in your personal details viz,. name, address, PAN no,bank account details or growth. It is also advisable that you communicate any changes in the address, bank account number, etc. at a later date to the mutual fund immediately. You can drop the application form at any of the investor service centres of the mutual fund or simply hand it over to your agent who will do it for you.

When the investment objective is met, or when you wish to rebalance your asset allocation, what this essentially means is that if you had allocated say 50% of your total investments to a debt fund and the other 50% to an equity fund. Now, because of the change in NAV, the proportion of investments in each of these funds is differently. In order to rebalance this, you need to sell some and buy some units according.

Alternately, you should sell your investments if the fund is consistently underperforming, or if it is not adhering to the investment objective.

You can sell your holding by filling in an application form for redemption. You can simply tear off the transaction slip, which forms the bottom portion of the accounts statement that is sent to you when you invested for the time. If you don’t have it with you, the same can be obtained from the mutual fund or by simply calling your broker.

The redemption form should be submitted to the fund duly filled before the cut-off time so as to enable you to get the same day’s NAV. Then you simply wait you the cheque to be couriered to your house or you can avail of a direct credit facility through which the money is directly credited to your bank account. You will get a fresh accounts statement showing your holdings post the redemption.

Of course, you can sell in parts provided you keep the bare minimum prescribed by the fund in order to continue your account with the same folio (a unique number to identity your holdings) allotted to you.

Mutual fundsare required to disclose full portfolios of all of their schemes on a half-yearly basis, which are normally published in newspapers. Some mutual funds send the portfolios to their unitholders. This disclosure helps an investor in understanding the manner in which his/her investment is channeled by the fund. It shows investments made by the scheme in each security, i.e, equity, debentures, money market instruments, government securities, etc. and their quantity, market value and % to NAV. These portfolio statements are also required to disclose illiquid securities in the portfolio, investment made in rated and unrated debt securities, non-performing assets (NPAs), etc.

There’s nothing to worry about here. In case of winding up of a scheme, unit-holders receive a report from the fund giving all the necessary details. Also, the mutual funds pay a sum to the unit holders, based on the prevailing NAV after adjustment of expenses.

A unit holder in a mutual fund scheme government by the SEBI (Mutual Funds) Regulations is entitled to :

1. Receive unit certificates or statements of accounts confirming the title within 6 weeks from the date of closure of the subscription of within 6 weeks from the date that the request for a unit certificate is received by the mutual fund.

The offer document clearly spells out the name and the address of the person whom investors can approach to solve their queries, complaints and grievances. Trustees of a mutual fund monitor the activities to the mutual fund. The names of the directors of the AMC as well as the trustees are also given in the offer documents. You can also approach the mutual fund’s investor service centre to file your queries, complaints or grievances. As a last resort, you can approach SEBI for redressal in case your complaints are unresolved by the fund. SEBI takes up the matter with the concerned mutual fund and follows up with it regularly. Investors may send their complaints to :