Mistakes to avoid when reading your mutual fund statement

Your mutual fund statement is a detailed document that provides information related to your investments. Asset management companies (AMCs) or fund houses that offer mutual funds are required by law to provide investors with fund statements upon request for any time period. Thus, the mutual fund statement can be accessed 24/7 on the AMC website. Although each AMC may use a slightly different structure and layout for their mutual fund statements, the essential information is always the same.

• Table of contents

1. Common mistakes to avoid
2. FAQs

Common mistakes to avoid

Here are mistakes to avoid when reading mutual fund statement:

• Verify the personal details: First and foremost, you should verify that your name is mentioned correctly in the fund document. Next, verify the address and report any disparity immediately to the mutual fund distributor or relationship manager.
• Check banking information: Verify there are no typos and that all the information – including your bank's name, account number, PAN, and IFSC code – is correct. This is especially relevant if you want to redeem your investment or if you have registered for a Systematic Investment Plan (SIP).
• Check KYC status: The KYC status must show ‘OK’; if not, complete the process right away. For compliance purposes and to have access to financial services, it is essential that the KYC status indicates ‘OK’. To prevent any delays or disturbances, make sure that any inconsistencies are immediately corrected.
• Report discrepancies: Notify the fund house immediately if there are any discrepancies in information. Failing to do so could potentially impact your investment goals. It's crucial to ensure accuracy to safeguard your investment portfolio.
• Assess transaction summary: Pay attention to the dates, amounts, NAVs (Net Asset Value), and units bought/sold. Verify if transactions align with your investment strategy.
• Monitor portfolio holdings: Evaluate any significant changes in holdings that may have shifted from your original allocation.
• Add a nominee: This is important to ensure a smooth transfer of assets in case of an unfortunate event. It's vital for safeguarding your financial legacy and ensuring that your assets are seamlessly passed on to your chosen beneficiary when needed.
• Exit load: Remember that the exit load that applies upon redemption is the one that was in place at the time the investment was made, not the mutual fund's current exit load structure.

Conclusion

You need to carefully review your mutual fund statements the same way as you do with your bank and credit card accounts. Report a disparity to the mutual fund company if you find one. Verify whether your PAN card has been updated in the portfolio. The consolidated mutual fund statement provides you with an overview of your portfolio by revealing how much has been invested and in which scheme. By understanding the key sections and focusing on relevant information, you can stay on top of your investments and potentially achieve your financial goals.

FAQs

How do you read a mutual fund statement?
To read a mutual fund statement, start with the summary section for key details like account balance and performance. Check fund performance over different time frames, review transactions, understand holdings, and note fees.

How often should I review my mutual fund statement?
You should ideally review your mutual fund statement at least once every quarter. This allows you to stay informed about your investment's performance, any transactions, and changes in fees. However, you may choose to review it more frequently, such as monthly, depending on your investment goals and preferences.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.