1. What is a Mutual Fund?
A mutual fund is a trust that is professionally-managed. It pools the funds of many investors who share a common financial goal. Mutual Fund trust then invests this fund in assets like stock, bonds, golds etc.
2. What is Open Ended Fund?
In an open ended fund, investors can buy and/or sell units at any time according to their convenience. The units can be purchased and sold even after the New Fund Offering (NFO) period (in case of new funds).
3. What is Closed Ended Fund?
A closed ended fund is where the fund house raises capital through a New Fund Offer (NFO) with a predefined investment objective, type of securities and predetermined maturity date. The NFO generally has a window of 15 days after which fund units cannot be bought or sold. The prices can be seen and tracked just like other funds.
4. What is Equity mutual fund?
The fund managers of equity mutual fund invests the funds in BSE/NSE listed equities. The fund managers make painstaking effort to study the industry and the company before picking on the equity to invest. Once invested they also keep a close watch on the performance of the company. The fund managers are guided and regulated by SEBI.
The fund managers are expected to take adequate measures to safeguard the interest of the investor by diversification and active management of the equities.
5. What is Debt Fund?
The fund managers of debt fund lend the funds to companies, banks, government etc. The income for fund is from the interest receipts and bond price variation. The lending process is preceded by full due diligence on principal protection, interest paying capacity, credit quality of the borrower, principal repayment capacity and the tenure of borrowing.
Companies, state governments and even the central government all require money to run their operations. They offer various debt based instruments like T-Bills, Debentures, and G-Secs etc. Mutual Funds buy the debt that is issued by them.
These Funds would typically invest in government securities, NCD, CDs, CPs bonds and other fixed income securities as well as lend money to large organizations or Corporates, in return of a fixed interest rate.
6. What is cash or liquid Funds?
In financial terms, the word “Liquid” simply means cash. A highly liquid asset is as good as hard cash. Here the redemption is also faster, you can park your funds in this category instead of letting it lie idle in savings bank account;
Liquid Mutual Funds have the least risk factor and may give you returns that are slightly higher than a savings account
These funds invest in faster maturing debt securities, therefore making them less risky.
The closer the debt instrument is to its maturity, the higher the chances and surety of you getting the principal and interest.
7. What is Hybrid Fund?
A hybrid fund invests in equities as well as debt instruments based on scheme document approved by SEBI.
8. What is a Sector Fund?
A mutual fund scheme which invests in equities of companies of given sector in the economy is called 'Sector Fund'. For example, Pharma Fund, Infra Fund etc.
9. What is Thematic Fund?
Thematic fund has a central theme underlying the selection process for investment. For example UTI Infrastructure and Logistics fund, HDFC housing opportunities fund etc. By nature thematic funds are more prone to risk and volatility.
10. What are the advantages of Mutual Funds?
Mutual funds offer flexibility, choice, tax advantages and market participation in addition to that;
1. Mutual Funds are managed by SEBI regulated professional.
2. Offers Diversification
3. Easy and Convenient Administration
4. Return potential
5. Low cost
9. Choice of schemes
10. Well regulated
11. Tax benefits
11. What is NAV (Net Asset Value)?
The NAV is like the price of a Mutual Fund Unit. The value of all the securities in mutual funds portfolio is calculated on daily basis. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the funds NAV or its Net Asset Value.
NAV = (Fund Asset – Fund Liabilities)/Outstanding Units
12. What is Asset Management Company (AMC)?
A company which manages the investment of the investors by appointing in house fund managers are Asset Management Companies, the funds do not go to the AMC the funds are held in a trust, and AMC only manages the investment process.
13. Who are Trustees?
The Trustees ensure that the AMC has put in place adequate back office, dealing and accounting systems. The Trustees also ensure that the AMC has appointed all key personnel, including fund manager(s) for the various schemes, auditors, compliance officers, registrars, etc. The Trustee also ensure preparation of the compliance manual and design internal control mechanisms, including internal audit systems.
14. Who is a Custodian?
Keeps safe custody of the investment related documents of securities invested.
15. Who is a Sponsor?
A Sponsor establishes the Mutual Fund along with any individual/body corporate. The Sponsor’s liability is restricted to his contribution. Sponsor must contribute a minimum 40% to the net worth of AMC. Sponsor is a person who has a continuing interest in the Mutual Fund and whose credibility is significantly responsible for mobilizing the savings of the public for the Mutual Fund.
16. Who are Transfer Agents?
Registrar or transfer agents are the trusts or institutions that register and maintain detailed records of the transactions of investors for the convenience of mutual fund houses.
17. Who appoints Fund Manager?
Fund House appoints the Fund Manager.
18. What is Systematic Investment Plan (SIP)?
Systematic Investment Plan (SIP) is a financial planning tool that helps investors to create wealth, by investing small sums of money every month, over a period of time.
A Systematic Investment Plan (SIP) is a vehicle offered by mutual funds to help investors invest regularly in a disciplined manner.
19. What is Systematic Withdrawal Plan (SWP)?
Systematic Withdrawal Plan allows an investor to withdraw a fixed or variable amount from his mutual fund scheme on a preset date every month, quarterly, semi-annually or annually as per his or her needs.
20. What is Systematic Transfer Plan (STP)?
An STP (Systematic Transfer Plan) is a plan that allows investor to give consent to the Mutual fund to periodically transfer a certain amount / switch(redeem) certain units from one scheme and invest in another Scheme.
21. What are the advantages of Systematic Investment Plan (SIP)?
1. Rupee Cost Averaging
2. Power of Compounding
3. Investment Convenience
22. What is Rupee Cost Averaging?
Investors generally tend to speculate on the right time to invest. But it is a known fact that no one can predict where the market is going to move-upwards or downwards. Rupee-cost averaging has been the answer to such a scenario.
With rupee-cost averaging, an investor invests a specific amount at regular intervals irrespective of the investment’s share (unit) price. By investing regularly, the investor takes advantage of market dips without worrying about when they’ll happen. Their money buys more units when the price is low and fewer when the price is high, which can mean a lower average cost per unit over a period of time.
23. What are the advantages of Rupee Cost Averaging in SIP?
1. Averaging reduces the risk factor associated with lumpsum investing. For example we all are familiar with the scenario where investors who invested their money at one go when market was at its peak in the year 2007-2008 what their plight was when market crashed drastically in the year 2008. With RCA, investors get a buying opportunity when the NAV falls as he will be able to accumulate more units of the mutual fund scheme.
2. RCA frees investors from the onus of monitoring stock positions on a daily basis which would be the scenario in case of lumpsum investment or VCA.
3. It serves as a cushion against the downward trend of the market.
4. Investor no longer needs to look at dates, markets or anything.
5. Investor no longer needs to monitor external factors like economy condition, interest rates, inflation etc.
6. It is a disciplined approach towards investing regularly in mutual funds.
1. Who can get access to Sipfund.com platform?
Sipfund.com platform can be accessed by anyone but as per the regulation only investors with valid KYC can invest through us.
2. What are the documents need to be submitted for individuals?
We need the below mentioned documents for doing KYC and activation of the account.
A. Self affected PAN copy
B. Self Attested Aadhaar copy (Both front & back)
C. Passport Size Photo
D. Cancelled Cheque leaf
3. Are there any charges for opening this account?
Account opening is completely FREE, there are no charges.
4. Are there any charges Per transaction?
There are no charges from SIPfund.com for doing transaction through our platform. The platform is completely FREE.
5. Are there any annual charge?
There are no annual charges for investing in mutual funds.
6. What is the process to access the platform?
After registration with us, an investor registration form is generated you sign the Investor Form and submit it to us along with a cancelled cheque because account number is required for registration. The investor shall be enabled for transacting on the platform only when the investor registration form along with cancelled cheque is received is verified and client becomes KYC compliant.
7. What facilities are available on the platform?
Sipfund.com facilitates following activities:-
Check KYC status
Facility to enquire about investor’s transaction / Product summary
Generating Portfolio statement
Buying & selling of Mutual funds from all the major fund houses
Generation of reports
8. Can an investor have multiple registrations on the platform?
The investor can register on this platform only once i.e. he will have a unique registration on this platform. The investor registration is a combination of his PAN number and mode of holding, accordingly, an investor can only one registration on this platform based on his PAN + email + mobile + mode of holding. This is mandated as well as for security reasons.
9. Can an investor transact on this platform?
Yes, you can buy, redeem, and start/stop SIP on this platform once you are registered.
10. What is a mandatory pre-requisite for doing a transaction on the platform?
The investor has to be KYC & FATCA compliant to be able to transact on the platform. For all new investors with fresh KYC, for whom the KYC status is not verified or submitted (as reflected on the KRA system which is separate from MF platform), the investor will be eligible to invest subsequent to the receipt of the KYC acknowledgement from the KRA.
11. Can I hold my units or investment in demat mode?
12. What documents are required to be submitted in case of Systematic Registration?
For systematic registration transactions:
ACH debit mandate form along with cancelled cheque (in case of new folio).
However, in case of SIP registration in existing folio there is no requirement to submit cancelled cheque, submission of only an ACH debit mandate.
13. In case of cheque transactions the cheque has to draw in which name?
The Cheque transaction facility is available only to Bangalore & Nagpur based clients. The investors in rest of the locations can make online payments.
14. What are the different modes of making payment available to the investor?
We supports payment of subscription amount by online payment through RTGS/ NEFT, internet banking and IMPS.
15. In case of online payments what is the process?
Our platform supports two modes:
The investor can initiate the transaction from his/her login and make payment via net banking.
In case of RTGS / NEFT transactions the investor has to register NSCCL account in beneficiary list first to make the payment.
Alternatively we can enter the order on the platform on behalf of the investor and forward payment link to the investor to make payment through his login.
16. Can Investor make online payment from only his account registered on the platform or any other account also?
The investor can make online payment only through his account registered on the platform at the time of investor creation. Any point of time he gets the flexibility of changing his back account details by providing a copy of canceled cheque & verifying some security details.
17. What is the process of NAV applicability?
For all transactions the unit allotment happens only on realization of funds. If funds purchased before 3 PM of a trading day then same day (End of the day) NAV will be applicable to allotted units.
For transaction made after 3 PM units allotted will have next trading day (End of the day) NAV.
18. When will amount be received by investors in case of Redemptions?
For redemption orders placed on T-day before 3 pm the funds will be credited in the investor account as per Scheme Settlement calendar.
For redemption request made after 3 PM, the units are sold next day.
19. Are they any restrictions on maximum or minimum value or quantity for a single order on platform?
The restrictions of minimum or maximum amount are specified by AMC, there are no platform level restrictions.
20. Once a transaction is submitted on the platform, is there any scope for cancellation of the same.
For Purchase: once you make payment transaction cannot be cancelled but you can redeem/sale the units once you are allotted the units should you wish to exit the investment.
For Redemption: Once you place redemption request, you shall be asked confirmation by email/SMS OTP only after that the redemption transaction will go. Once you submit OTP transaction cannot be reversed.
21. Are they any restrictions on maximum or minimum value or quantity for a single order on platform?
Currently, 52 banks are enabled for online payment which shall be increased over a period of time.
|Allahabad Bank||Jammu and Kashmir Bank Ltd|
|Andhra Bank||Janata Sahakari Bank|
|Andhra Bank - Corporate Banking||Kalupur Commercial Coop Bank Ltd|
|Andhra Bank - Retail Banking||Kalyan Janata Sahakari Bank|
|Axis Bank Corporate||Karnataka Bank Ltd|
|Axis Bank Ltd||Karur Vysya Bank|
|Bandhan Bank||Kotak Bank|
|Bank of Bahrain and Kuwait||Laxmi Vilas Bank - Corporate Net Banking|
|Bank of Baroda - Corporate Banking||Laxmi Vilas Bank - Retail Net Banking|
|Bank of Baroda - Retail Banking||Mehsana Urban Co-operative Bank|
|Bank of India||NKGSB Bank|
|Bank of Maharashtra||Oriental Bank of Commerce|
|Bassein Catholic Bank||Punjab Co-op Bank|
|Bhartiya Mahila Bank||Punjab and Sind Bank|
|Canara Bank||Punjab National Bank - Corporate Banking|
|Catholic Syrian Bank||Punjab National Bank - Retail Banking|
|Central Bank of India||Ratnakar Bank|
|City Union Bank||Ratnakar Corporate Banking|
|Corporation Bank||Saraswat Bank|
|Cosmos Bank||Shamrao Vithal Bank Corporate|
|Dena Bank Net Banking||Shamrao Vitthal Co-operative Bank|
|Deutsche Bank||South Indian Bank|
|Development Credit Bank||Standard Chartered Bank|
|Development Credit Bank – Corporate||State Bank of Bikaner|
|Dhanlakshmi Bank - Corporate Net Banking||State Bank of Hyderabad|
|Dhanlakshmi Bank - Retail Net Banking||State Bank of India|
|DIGI Bank||State Bank of Mysore|
|Equitas Small Finance Bank||State Bank of Patiala|
|Federal Bank||State Bank of Travancore|
|HDFC Bank Ltd||Syndicate Bank|
|ICICI Bank Ltd||Tamilnad Mercantile Bank Ltd.|
|ICICI Bank Ltd – Corporate||The Royal Bank of Scotland|
|IDBI Corporate||TNSC Bank|
|IDFC Bank Netbanking||UCO Bank|
|Indian Bank||Union Bank of India|
|Indian Overseas Bank||United Bank of India|
|IndusInd Bank||Vijaya Bank|
|ING Vysya Bank||Yes Bank Ltd|