How To Read Mutual Fund Statements

As an investor in mutual funds, you will receive mutual funds statements at regular intervals from the fund house detailing the various schemes you have put your money in and their performance. These statements give you an idea of the health of your investments, based on which you can make informed decisions about managing them. But many terminologies are mentioned in these statements, so here is a guide to help you understand how to read them.

What is a mutual fund statement?

A mutual fund statement provides a comprehensive summary of all the mutual fund investments you have made. If you ask for a statement from a particular fund house, you will get information only on the investments made by you in that fund house’s schemes. However, more often than not, investors invest in various schemes across mutual funds . In such cases, one can ask for a consolidated account statement from the registrar or a depository, which will give a detailed summary of investments in schemes across all mutual funds.

Understanding the Important Terms in a Mutual Fund Statement

Folio Number:

On investing in a mutual fund, you will be allotted a unique number called the folio number. The folio number is like an identification number that helps you track all your investments in mutual fund schemes.

Personal details:

This section will list your full name, correspondence address, email id, contact number, date of birth and investment category, i.e., whether single or joint investor. It might also mention your PAN number.

Nomination:

Providing a nominee (or opting out of nomination) is mandatory because that person can access your investments in the event of your death. This section highlights whether you have named a nominee without providing the nominee’s details. If you have selected one, then it will show as Registered.

Advisor or distributor details:

If you have invested in mutual funds through a distributor or a financial advisor, this section will provide all their details. If you have directly applied through the fund house, then the term ‘Direct’ will be mentioned.

Bank details:

Your bank account details, such as your account number, IFSC code, and bank name, will be highlighted in this section.

Transaction details:

Many aspects of your transaction will be highlighted here.

First, the name of the scheme in which you have invested. Second, the date on which the transaction has been affected.

Third, the net asset value (NAV) will be specified. NAV is the price of one unit of the fund and measures the fund’s performance.

Fourth is the NAV date. NAV is calculated at the end of every market day. If you want to purchase or redeem units of a mutual fund, applicable NAV is considered.

Fifth is the amount, which highlights the amount of money you have invested or withdrawn.

Sixth is the number of units you have bought/redeemed

Seventh is the current value, which is the current market price of your investments; current cost, which is the amount you had originally invested; load, which mentions any sales charge imposed by the fund house.

Lastly, the type of transaction which tells you whether you have purchased or redeemed units and the mode of investment – lump sum or through the systematic investment plan (SIP) route.

How Frequently Should You Check Mutual Fund Statements?

Once you have invested in a mutual fund scheme, keeping track of its performance through your mutual fund statements is important. While there is no specific answer concerning the frequency, you could consider checking your mutual fund statements at least once a year if you invested for the long term and more frequently if your investments are short-term.

To conclude…

Reading and analysing mutual fund statements is essential to investing in mutual funds. Thus, understanding the terminologies equips you with the knowledge and necessary data to make informed decisions on your investments going forward.