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PURCHASE/SELL MUTUAL FUND |
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DBS Cholamandalam Asset
Management Ltd.
27th Floor, Unit 1,
World Trade Centre, Centre 1
Cuffe Parade.
Mumbai – 400 005. |
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Purchasing mutual funds |
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Purchasing during NFO
Like companies, even mutual funds offer new fund offering.
It is when they launch the scheme for the first time. You can buy
units at par (usually Rs.10) on this occasion.
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Purchasing existing mutual fund units
You can buy units of an open-ended scheme any time at the
NAV-related price. Most mutual funds charge an entry load of up to
2-2.5%. This is the additional amount you have to shell out to buy
the units. You can buy the scheme directly from the mutual fund or
through its distributor.
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Selling mutual funds |
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You can sell or redeem units very easily. As per Sebi guidelines, a
mutual fund unit holder has the right to receive redemption or
repurchase proceeds within 10 days of the redemption or repurchase
request.
When should you sell your mutual fund investment is a crucial
question. Ideally, you should sell when you have met your target
profit. The other reason is that you need the money or your profile
has changed due to some changes in your life situation. Other than
this, you should sell the units if you find that the fund has been
taken over by another mutual fund house, whose investment
philosophy, reputation, etc. you are not comfortable with. Any major
changes in the objective of the fund or a sharp rise in expenses
could also be valid reasons to redeem units. Following a favorite
fund manager is also a usual practice. However, it need not be
always rewarding. |
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