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Being an investor of mutual funds, everyone is well aware of the fundamentals, process, and all other factors which they should know. But, are you sure you have enough information regarding the funds in which you intend to invest? Well, you must be.
It is a general behaviour of every investor that they never worry about the facts they don't know until they realise the implications of not knowing them. However, it is not right. While registering with any online portal, we come to the terms and conditions to confirm that we adhere to them and intend to get associated with them knowing all the facts and figures. But do we read them in actuality? Many of us don't. The reason being is that we believe it is a common practice and there won't be much impact of such T&Cs in our lives. Holding such a casual behaviour is sometimes fine, but in the case of mutual fund investments it may end up with various complications. Thus, it is quite essential for every investor to perform the duties and exercise the rights thoroughly in order to persuade a better investment.
The regulatory authorities in every country have set up certain guidelines for the mutual fund industry. We must adhere to them and follow the rules to make the best decision. All the Asset Management Companies (AMC) which design and manage the mutual fund programmes are obliged to disclose all the scheme related documents to the investors so that they can come to know about every vital detail about the fund in which they intend to invest. Investors too have certain duties to perform and different rights whenever they take an investment decision. They include:
Analyse the Offer Documents
The scheme related documents which include the SID, KIM, and SAI must be read thoroughly before buying the funds. They provide every single detail of the scheme including its nature, type, assets, portfolio, and instruments. With this, one can come to know about the fund's capacity to generate the required returns.
