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A Consolidated Account Statement (CAS) is a comprehensive report that brings together all your mutual fund transactions and holdings into a single document. Whether you’re investing for retirement, your child’s education, or planning an emergency fund, the CAS offers a complete picture of your portfolio, making it easier to track and manage your investments across various fund houses and securities.

Issued by the 10th of every month, the CAS details all your transactions—such as purchases, redemptions, and switches—along with distributor fees and the closing value of your investments. If you’ve registered your email ID, the CAS will be delivered electronically; otherwise, it will be sent to your registered address. You can also conveniently download it from platforms like CAMS and KFintech (Karvy).

For anyone seeking goal-based investing or wondering how to start goal-based investing in India, the CAS acts like a monthly report card, helping you stay organized and make informed decisions. It supports better budgeting and financial planning, essential for setting up strategies like a vacation savings plan or investment planning for a home purchase.

Whether you’re working with a certified financial planner, a wealth management consultant, or looking for a financial advisor in Pune, this statement is a vital tool. As a trusted mutual fund distributor in India, we recommend reviewing your CAS regularly to optimize your investment strategies for wealth creation and ensure your portfolio stays aligned with your financial goals.

To access your CAS, simply visit the CAMS or Karvy website, log in, and download the statement—it’s a small step that makes a big difference in your financial journey.

The new rule regarding the applicable Net Asset Value (NAV) for mutual fund transactions, which occurred on February 1, 2021, requires that the NAV for all purchase transactions be determined based on the realization of funds. This rule was already in place for liquid and overnight funds and has now been extended to all mutual fund schemes. The key change is that the funds must be available in the mutual fund’s bank account before the cut-off time for the NAV to be applicable for that business day.

The value of a mutual fund, known as its Net Asset Value (NAV), changes daily. The NAV at which you buy or sell mutual fund units depends on when you submit your transaction. This is determined by the cut-off time and the deadline for submitting your investment or redemption request.

Key Points:

• Cut-off time refers to the specific deadline for transactions to be processed for the same day’s NAV.
• NAV (Net Asset Value) determines the value of your mutual fund units. If the transaction is completed before the cut-off time, the NAV of that day applies. If it’s after the cut-off, the next business day’s NAV applies.
• For SIP or lump sum transactions, if the funds are received after the cut-off, the NAV of the next business day will apply.

Examples

• Lump Sum Purchase: If a ₹50,000 transaction is made on Thursday, February 11, 2021, before the cut-off time of 3:00 p.m., but the funds arrive after the cut-off time, the NAV for Friday, February 12, 2021, will be applicable. If funds arrive after 3:00 p.m. on Friday, the NAV for Monday, February 15, 2021 (due to the weekend) will apply.
• SIP Transactions: If an SIP payment is scheduled for the 10th of each month, the NAV for that date is applicable only if the funds are credited to the mutual fund’s account before 3:00 p.m. on the 10th. Otherwise, the NAV for the next business day will be applied.

Inter-Scheme Switching

For inter-scheme switches:

• Switch-out transactions: Treated as redemptions and processed at the same day’s NAV if received before the cut-off time.
• Switch-in transactions: Treated as purchase transactions and processed based on the fund realization, applying the NAV of the business day when funds are received before the cut-off time.

NFO and Dividend Reinvestment

• NFO Subscriptions: Units are allotted based on the realization of funds before the NFO closure date.
• Dividend Reinvestment: Units are allotted at the ex-dividend NAV.

• The new rule emphasizes that mutual fund transactions (whether through physical or online platforms) will be processed only when funds are realized, ensuring transparency and accuracy in the NAV allocation. This reduces the possibility of discrepancies and promotes better investment planning.

Our View: While knowing these cut-off timings is good, don’t stress too much about them. If you’re investing a large amount, it might make a difference. But for smaller amounts, a day or two here or there usually won’t affect your investment in the long run.
Mutual fund cut-off time, NAV cut-off time for mutual funds, Mutual fund transaction cut-off time, NAV for mutual fund transactions, SIP cut-off time, Liquid fund NAV timing, Redemption cut-off time for mutual funds.

Mutual funds are a popular investment choice for diversifying their portfolios and achieving financial goals. However, navigating the complexities of mutual fund investments requires expertise. A mutual fund advisor can play a pivotal role in aligning your investments with your goals, risk tolerance, and financial timeline. Here’s a guide to understanding their role and selecting the right one.

Role of a Mutual Fund Advisor

A mutual fund advisor specialises in helping investors make informed decisions by:

• Identifying Financial Needs: They assess your financial situation, goals, and timelines to recommend suitable investment strategies.
• Risk Assessment: Advisors evaluate your risk tolerance and help choose funds aligning with your comfort level and objectives.
• Portfolio Management: They suggest diversified portfolios tailored to your goals, periodically reviewing and rebalancing to match market conditions.
• Education: Advisors explain various mutual funds’ benefits, risks, and limitations to ensure informed decisions.
• Proactive Adjustments: Monitor your investments; they recommend course corrections during market changes or life events.

Key Qualities to Look for in a Mutual Fund Advisor

1. Experience and Market Knowledge:
   Advisors with substantial experience, especially through market fluctuations, are better equipped to navigate challenges.
2. Client-Centric Approach:
   A good advisor prioritizes your financial goals over personal commissions, focusing on strategies that benefit you.
3. Transparency in Communication:
   They should provide clear details about investment plans, associated charges, and potential risks.
4. Professional Credentials:
   Look for advisors certified by organizations like AMFI (Association of Mutual Funds in India) or holding CFP (Certified Financial Planner) qualifications.
5. Proactive Engagement:
   An effective advisor provides regular updates, is accessible for queries, and maintains open communication about portfolio performance.
6. Tailored Asset Allocation:
   A good advisor customizes your portfolio based on your risk profile, financial goals, and investment horizon, ensuring proper diversification.

How to Choose the Best Advisor

• Referrals and Reviews: Speak to other investors to gauge an advisor’s effectiveness.
• Evaluate Investment Philosophy: Ensure their approach aligns with your goals and comfort level.
• Understand Compensation Models: Be wary of advisors who prioritize funds offering higher commissions over client needs.

Conclusion

A mutual fund advisor simplifies the complexities of investing, helping you achieve financial success. Choose an advisor who combines expertise with a client-first approach, ensuring your portfolio aligns with your evolving goals. Regular communication, transparency, and proactive management are hallmarks of an excellent advisor, making them invaluable partners in your wealth-building journey.

In 2018, the Securities and Exchange Board of India (SEBI) introduced a significant change in measuring mutual fund performance. SEBI mandated that mutual funds use the Total Return Index (TRI) instead of the Price Return Index (PRI) to provide a more precise and accurate picture of fund performance.

An index is a tool that measures how a group of stocks performs. For example, Nifty50 tracks the performance of 50 large companies listed on the stock market. The value of an index changes based on the price movements of the companies it includes. Mutual funds use these indexes to compare their performance. If a fund’s return is higher than its index, it is said to have outperformed it.

An index measures the performance of a group of stocks, and mutual funds use these indexes to compare their returns. For example, the Nifty50 tracks the performance of 50 large companies. When comparing a fund’s returns to the Nifty50 index, it has outperformed the index if the fund’s return is higher.

Price Return Index (PRI)

The Price Return Index (PRI) only considers the price change of stocks in the index. It measures how much the stock prices go up or down but ignores any dividends or interest earned from those stocks. For example, if an index rises by 10% but pays out a 2% dividend, PRI would only show the 10% price rise, not the total return, including the dividend.

Total Return Index (TRI)

The Total Return Index (TRI), on the other hand, provides a fuller picture. It considers both the capital appreciation (price changes) and any dividends or interest paid by the companies in the index. This means TRI assumes that dividends or interest are reinvested into the index. So, if an index shows a 10% rise in price and a 2% dividend, the TRI would show a total return of 12%.

Why the Switch from PRI to TRI?

The shift to TRI has dramatically impacted how we understand mutual fund performance. PRI could sometimes be misleading because it ignores dividends, an essential part of an investor’s return. With TRI, investors get a complete picture of their earnings, including both price changes and dividends.

For example, a fund might show a return of 7%, but if the PRI return is 6.5%, it could seem like the fund has outperformed the benchmark. But when you add dividends, the benchmark’s return might be 8%, meaning the fund didn’t perform as well as it seemed.

Key Differences Between PRI and TRI

 Conclusion

The switch to TRI ensures investors get a more realistic and transparent view of mutual fund performance. By including price changes and dividends, TRI clarifies how well an investment is performing, helping investors make more informed decisions about their investments.

Mutual Fund investments are subject to market risks. Always read the scheme-related documents carefully before investing.

A capital gain statement is like a report card for your investments. It shows the profit or loss you made from buying and selling mutual funds, stocks, or other assets. It’s important for understanding your taxes, tracking your investment performance, and planning for the future.

Why Do You Need a Capital Gain Statement?

1. Tax Planning: It helps you calculate the tax you must pay on your investment profits.
2. Investment Tracking: It shows how well your investments are doing over time.
3. Financial Planning: It helps you make wise investment decisions.

Where Can You Get Your Capital Gain Statement?

1) Online Platforms

• Log in to your account.
• Go to the “Portfolio” or “Reports” section.
• Choose “Capital Gain Statement” and select the period you need.
• Download the statement.

2) Registrar and Transfer Agents (RTAs)

Companies like CAMS and KFin Technologies manage mutual fund records. To get your statement:

• Visit their website and log in.
• Go to the “Statements” section and select “Capital Gain Statement.”
• Enter your details, pick the time frame, and download the report.

3) Mutual Fund Companies

If you invested directly with a mutual fund company:

• Log in to their website using your account.
• Find the “Capital Gain Statement” section.
• Choose the period and download the document.

Final Thoughts

Keep your financial records organized and regularly check your statements. This will help you stay on top of your investments and ensure you’re ready for tax season!

Following these simple steps, you can easily access your capital gain statement and manage your financial goals.

Here are the links to get your Capital Gain Statements from RTAs:

• CAMS: Capital Gain Statement

• Karvy: Capital Gain Statement

Using these statements, you can ensure you pay the correct taxes and keep your investments in check.

A Direct Plan is an investment option in mutual funds that allows investors to buy units directly from the Asset Management Company (AMC) without involving intermediaries like distributors or agents, It’s DIY (Do It Yourself). Introduced by SEBI in January 2013, Direct Plans aim to reduce investors’ costs by eliminating distribution expenses and commissions, typically included in Regular Plans.

While both Direct and Regular Plans belong to the same mutual fund scheme, share the same portfolio, and are managed by the same fund manager, they differ in expense ratios. Direct Plans have lower expense ratios because there is no intermediary commission, leading to a slightly higher Net Asset Value (NAV) than Regular Plans. Over time, these cost savings can compound into higher returns for investors.

Direct Plans are ideal for knowledgeable, Do-it-Yourself (DIY) investors who can independently research and select mutual fund schemes suited to their financial goals. However, these plans may not be suitable for new or inexperienced investors, who might benefit from the guidance of a distributor or financial advisor, especially during market downturns.

How to Invest in a Direct Plan?

Investing in Direct Plans can be done online through:

1. Mutual fund websites.
2. Platforms like Mutual Fund Utility (MFU) or stock exchange platforms.
3. Private portals offering Direct Plans (e.g., Paytm Money, Groww, Zerodha Coin).

Alternatively, investors can use physical application forms submitted to the AMC or its registrar (e.g., CAMS, KFintech). When applying, ensure you select the “Direct Plan” option and avoid entering any distributor code.

Key Considerations

Direct Plans are like buying directly from a manufacturer, saving costs compared to buying through intermediaries. While the investment mix, objective, and fund manager remain the same between Direct and Regular Plans, the NAV and expense ratio differ. For example:

• ICICI Prudential Value Discovery Fund – Direct Plan: Expense Ratio 1.06%.
• ICICI Prudential Value Discovery Fund – Regular Plan: Expense Ratio 1.55%.

So, the brokerage is 1.55 – 1.06 = 0.49, i.e. the brokerage received by the distributor.

In summary, Direct Plans offer cost savings and higher long-term returns but require adequate knowledge of mutual fund investing. New investors may still benefit from professional advice or distributors until they gain confidence in fund selection.

A mutual fund is like a big basket that collects money from different people (investors) and invests it in various things such as stocks, bonds, or other assets. This basket is managed by experts who aim to grow the money over time. Let’s break down how a mutual fund works by understanding the key parts of its structure and participants.

Key Players in the Mutual Fund Structure

1. Sponsors

Sponsors are the founders or creators of a mutual fund. They set up the fund and ensure everything is in place, including appointing trustees to oversee its operations. Sponsors also ensure that the fund complies with the rules set by SEBI (Securities and Exchange Board of India).

For example, ICICI Bank and Prudential Plc are the sponsors of the ICICI Mutual Fund.

Sponsors must meet strict conditions such as having at least five years of experience in financial services and maintaining a positive net worth during that time.

2. Trustees

Trustees act as the watchdogs of the mutual fund. Their main job is to protect the interests of the investors and ensure the fund is managed responsibly. Trustees oversee the operations of the Asset Management Company (AMC) and make sure everything complies with SEBI regulations.

For instance, ICICI Trust Limited is the trustee for ICICI Mutual Fund.

At least two-thirds of the trustees in a mutual fund must be independent, meaning they should not be connected to the sponsor.

3. Asset Management Company (AMC)

The AMC is like the manager of the mutual fund. Based on the fund’s goals, it decides where to invest the collected money, whether in stocks, bonds, or other securities. The AMC also handles the fund’s day-to-day operations.

For example, ICICI Prudential Asset Management Company Ltd is the AMC for the ICICI Mutual Fund.

India has 44 AMC managing various mutual fund schemes, including well-known names such as:

• HDFC Mutual Fund
• SBI Mutual Fund
• Tata Mutual Fund
• Axis Mutual Fund

Other Important Participants

1. Custodians: They safeguard the fund’s assets and handle the delivery of securities. They also update investors about their holdings and manage benefits like bonuses and dividends.
2. Registrar and Transfer Agents (RTAs): RTAs maintain investor records, process applications, and provide regular updates. For example, CAMS and KFintech are major RTAs in India.
3. Auditors: Auditors check the fund’s finances to ensure transparency and compliance with regulations.
4. Brokers: Brokers help buy and sell securities in the stock market on behalf of the AMC.
5. Intermediaries include distributors, agents, and bankers who help investors choose and invest in mutual funds.

Here’s the list of 44 Asset Management Companies (AMCs) in India in table format:

How Does This Structure Benefit Investors?

The mutual fund structure is carefully designed to protect investors’ money. Each participant has a specific role, ensuring the system is transparent, regulated, and efficient. With SEBI’s oversight, mutual funds remain a trusted way for people to grow their wealth while diversifying their investments.

By understanding these parts, you can make smarter investment decisions and confidently explore the world of mutual funds!

1. Custodian
   The custodian protects and keeps the securities (like stocks or bonds) the mutual fund buys. They are like the safe keepers of the fund’s investments, ensuring everything is safe and secure. For example, HDFC Bank is the custodian of the ICICI Prudential Mutual Fund.
2. Registrar & Transfer Agents (R&T)
   R&T agents are in charge of handling the paperwork for mutual fund investors. They process the application forms when someone buys or sells mutual fund units, send out account statements, and ensure that investors’ information is updated. Two main R&T agents in India are CAMS and Karvy, which handle transactions for several mutual funds.
3. Regulator
   The Securities and Exchange Board of India (SEBI) is the primary authority overseeing mutual funds in India. SEBI ensures that mutual funds follow the rules and protect investors. It sets the guidelines for mutual funds and safeguards investors’ rights. The Association of Mutual Funds in India (AMFI) is another essential body that helps mutual funds operate smoothly and recommends best practices.

Understanding the structure of a mutual fund helps you see how your money is being managed. It’s important to know that these different parts of the mutual fund work together to ensure that your investment is safe and that the fund operates according to the rules. So, when you invest in a mutual fund, you can be confident that professionals are managing it carefully and responsibly.

When you redeem (sell) a mutual fund, the time it takes to get your money depends on the type of fund. Here’s how long it typically takes:

• Liquid Funds: You’ll receive your money in 1 working day [Transaction Day plus 1 day (T+1)]
• Debt Funds: The money will reach your bank in 1 working day [Transaction Day plus 1 day (T+1)]
• Equity Funds: It will take two working days [Transaction Day plus 2 days (T+2)].
• Hybrid Funds: It will take two working days [Transaction Day plus 2 days (T+2)].
• International Funds: These can take up to 5 working days [Transaction Day plus 5 days (T+5)]

(T is the date the order was approved.)

If you place your order before 3 PM on a working day, the time mentioned above applies. Orders after 3 PM are considered as the next day’s transactions. Remember that weekends and holidays are not counted as working days so that they can delay the process.

Your money will be credited directly to the bank account you provided when you signed up for the mutual fund.

An Investment Advisor plays a vital role in helping individuals and organizations make informed financial decisions. Often referred to as stockbrokers or financial advisors, these professionals provide tailored investment recommendations and manage clients’ assets for a fee. The term “investment advisor” is officially defined by the Investment Advisers Act of 1940, with those overseeing $100 million or more in assets required to register as Registered Investment Advisers (RIAs) with the Securities and Exchange Commission (SEC). Advisors managing less are typically registered at the state level.

Investment advisors operate under a fiduciary duty, prioritising clients’ best interests over their own. They design strategies to meet clients’ financial goals, balancing risk and potential returns while minimizing conflicts of interest. Their fee structures, often tied to the size or performance of the portfolio, align their success with that of their clients.

Key Roles of an Investment Advisor

1. Financial Planning: Advisors analyze clients’ current financial situations and goals, such as retirement, education funding, or wealth building, to develop comprehensive, customized plans.
2. Investment Strategy Development: They guide clients in allocating assets across stocks, bonds, mutual funds, real estate, and other classes based on risk tolerance and time horizons.
3. Portfolio Management: Advisors actively monitor portfolios, making necessary adjustments to keep them aligned with market trends and evolving client needs.
4. Risk Management: They ensure diversification to mitigate risks and educate clients on the potential challenges of various investment options.

How They Work

Advisors often receive discretionary authority from clients, enabling them to act on behalf of clients without requiring prior approval for every transaction. This authority, granted during onboarding, allows advisors to respond swiftly to market changes. Transparent fee structures ensure that advisors work in the client’s best interest while maintaining oversight through mandatory registration and record-keeping.

Real-Life Example

Consider a 65-year-old retiree with $1 million in savings. An investment advisor evaluates the retiree’s goals, risk tolerance, and financial circumstances. The advisor then crafts a strategy to preserve capital while generating steady returns, provides clear explanations of risks, and regularly monitors and updates the portfolio to ensure alignment with goals.

Conclusion

Working with an investment advisor is like having a financial doctor. They bring expertise, research, and emotional stability to your financial journey, ensuring that you remain on track toward your long-term goals. Choosing the right advisor fosters trust and sets the foundation for financial security and growth.

A benchmark is a standard used to measure how well a mutual fund is performing. It acts as a reference point to compare how much the fund has earned versus how much it should have earned. In India, the Securities and Exchange Board of India (SEBI) requires all mutual funds to declare their benchmark index. This helps investors understand how their investment is doing compared to a specific market index, like the Sensex or Nifty.

1. For example, if your mutual fund is benchmarked to the Sensex, its returns are compared to how well the Sensex performs. If the Sensex rises by 14% in a year, and your mutual fund grows by 12%, your fund has underperformed. But if your mutual fund grows by 16% while the Sensex grows by only 14%, your fund has outperformed.
2. The fund house (the company managing the fund) decides which benchmark is most suitable for their mutual fund. For large-cap funds, benchmarks like the Sensex or Nifty are standard. For small or mid-cap funds, indexes like the CNX Midcap or Smallcap are used.

Importance of Benchmarking

Benchmarking is important because it allows you to see how your investment is doing. If a mutual fund performs better than its benchmark, it means the fund manager is doing well. On the other hand, if the fund is performing worse than its benchmark, it may not be managed well.

When comparing a fund to its benchmark, it is essential to look at the performance over a longer period, like one year or more. This gives you enough time to judge how well the fund is doing.

How to Measure Fund Performance

To measure how your mutual fund is performing, check if it has earned more than its benchmark. The fund has done well if the return is higher than the benchmark. Also, you can use financial ratios like Beta, Alpha, and R-squared to understand the risk and performance of your fund compared to the benchmark.

In short, benchmarks help you track and assess the performance and strategy of your mutual fund investment.

This table provides examples of mutual fund schemes along with their respective benchmark indices. The benchmark for each scheme represents a broad market index or a segment of the market, depending on the scheme’s focus (e.g., large-cap, mid-cap, or sectoral).