(From Research Desk - Value Research Online)

In a move aimed at increasing transparency among mutual funds, the Securities and Exchange Board of India (Sebi) has in a recent directive asked mutual funds to distribute dividends out of realised gains only, and not out of unit premium reserve.

What does this mean? Imagine that the face value of a fund is Rs 10, and over time its NAV rises to Rs 50. The Rs 40 (the gain in NAV) is the unit premium reserve.

 FundsIndia investors may have started receiving physical communications from the mutual fund companies recently. These may have been account statements (for recent and not-so-recent transactions), letters about verification, notes about registering PAN numbers etc.

What is going on? Why this sudden burst of activities?

Short answer:

(Originally published in MoneyControl.com)

Srikanth Meenakshi and Shankar Bhatt, FundsIndia.com

We were listening to the budget speech from the perspective of an individual investor in the country. We were looking for measures that would enhance the participation of investors in the capital markets in the country. A budget could do this in many ways – simply putting more money in investors’ pockets by reducing tax, encouraging tax-exempt investment contributions, making the investment process simpler etc. 

(Originally published in MoneyControl.com)

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Every year, the country awaits the pronouncements of the finance minister in the end of February with the anxiety and expectation akin to the one felt by relatives when an NRI comes home and opens his suitcase. Typically, everybody gets something but nobody gets everything they wanted or asked for.

(Originally published in MoneyControl.com)