Risk involved in Mutual Fund Investments :
- Market Risks
- Mutual funds are subject to market risks that may affect the value of investments.
- Market Volatility and NAV Impact
- Fluctuations in market conditions can lead to changes in the Net Asset Value (NAV) of the fund.
- Geo-Political Risks
- Events such as wars, political instability, or regulatory changes in countries can impact fund performance.
- Principal Investment Risk
- There is no guarantee of the return of the principal amount invested in mutual funds.
- Risk of Returns
- Returns on mutual funds are not fixed and are subject to market fluctuations.
- Past Performance Disclaimer
- Past performance of a mutual fund scheme does not guarantee future results.
- Change in Scheme Objectives
- The investment objective of a mutual fund scheme may change, which could affect its performance.
- Re-Categorization Risk
- Changes in the categorization of schemes by regulatory authorities or the AMC may alter the risk-return profile.
- Fund Management Risks
- Performance may vary due to changes in the fund management team or fund manager.
- Takeover or Merger of AMC
- Risks associated with the acquisition or merger of the Asset Management Company (AMC), leading to potential changes in management and strategy.
- Closure or Merging of AMC
- The closure of an AMC or its merging with another AMC may disrupt the management of funds.
- Segregated Portfolio Risks
- AMCs may segregate portfolios due to issuer defaults, market events, or unforeseen circumstances impacting fund liquidity and performance.
- Risks in New Fund Offerings (NFOs)
- NFOs may face price volatility, liquidity concerns, or even delisting risks.
- Scheme Winding Up
- Funds may be wound up due to illiquid instruments, high redemption pressures, or adverse market conditions.
- Force Majeure Risks
- Unforeseen events like natural disasters, pandemics, or global financial crises may impact investments.
- Default Risks
- Defaults or insolvency by issuers of securities held by the fund could affect NAV and returns.
- Inflation Risks
- Inflation may erode the real value of returns earned on mutual fund investments.
- Liquidity Risks
- Certain mutual fund schemes may have investments in illiquid securities, which can delay or impact redemption proceeds.
- Regulatory Risks
- Changes in government or SEBI regulations may impact the functioning or taxation of mutual funds.
- Foreign Investment Risks
- For funds investing overseas, currency fluctuations and geopolitical events in foreign markets could pose risks.
Investor Disclaimer: Mutual fund investors are requested to carefully evaluate all risks mentioned above and consult with Mutual Fund Distributors or financial advisors before making investment decisions.