Know Your Rights & Duties As a Mutual Fund Investor


As an investor in mutual funds, everyone is familiar with the fundamentals, the process and all the other factors they should know. But, are you sure you have enough information about the funds in which you want to invest? Well, you must be.

Each investor's general behavior is never to worry about facts they do not know before realizing the consequences of not knowing them. However, it is not fair. When registering for an online portal, we define the terms and conditions to confirm that we respect them and intend to associate them by knowing all the facts and figures. But do we actually read them? Many of us do not have one. The reason is that we believe that it is a common practice and that there will not be much impact of such T & C in our lives. Such occasional behavior is sometimes acceptable, but in the case of investments in mutual funds, this can result in a variety of complications. It is therefore essential that every investor complies with his obligations and exercises his rights thoroughly in order to persuade a better investment.

The regulators in each country have set some guidelines for the mutual fund industry. We must respect them and respect the rules to make the best decision. All asset management companies (AMCs) that design and manage mutual fund programs are required to disclose to investors all documents relating to the system so that they may be aware of all essential details concerning the fund in which they intend to invest. Investors also have certain obligations to fulfill and different rights each time they make an investment decision. They include:

Analyze the offer documents

System documents, including SID, KIM and IAD, must be read carefully before purchasing the funds. They provide all the details of the system, including its nature, type, assets, portfolio and instruments. With this, one can learn more about the fund's ability to generate the required returns.

Get annual reports, statements and periodic updates

Each investor has the right and the duty to obtain annual reports and declarations from the AMC. In addition, there may be other updates in mutual fund companies that each AMC must inform investors.

Receive dividends over time

Suppose you invest in SBI mutual funds and you hold equity funds with a dividend plan. Then you have the right to receive the dividends in the time that follow the declaration. This means that once the AMC declares the dividends, investors have the right to get their share on time.

Get updates for changes in templates

CMA fund managers continue to modify the fund portfolio to capture the best opportunities and provide better returns. Investors are entitled to receive information or updates on system changes so that they can take appropriate action in this regard whenever necessary.

Claim System

Each fund has a complaints mechanism that focuses on investor issues. Whenever you have a complaint, you can contact the AMC's Claims Resolution Department for an instant solution.

Details on the distribution commission

All investors have the right to know the amount of funds or commission paid to the mutual fund dealer by the management company. In addition, it is the responsibility of the distributor to inform the investor of commissions or compensation that he receives by selling other competing systems.

Awareness of the rights and duties of investors brings transparency to the fund management system. A well-regulated plan has distinct advantages that help investors obtain superior benefits. With this, investors have a clear vision of their investments and the opportunity to generate returns increases. You must be aware of any updates to the fund in which you invest or intend to invest your hard-earned money.

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