While there is a fair amount of unanimity on what to look for when buying a fund, opinions differ radically when the subject switches to redeeming one's units. Buying the right fund is as crucial as offloading the investment at the right time. But the predominant reason an investor would sell is solely dependent on his personal situation. Once the fund has delivered, he wants to book profits and rightly so. Alternatively, he could be in dire need of cash.

Here we tell you what other factors you should look out for to make sure you are on top of your portfolio.

July 13, 2009

After being floored by the law change that banned the charging of entry loads from investors by distributors by the Securities and Exchange Board of India (SEBI), the mutual fund (MF) industry has suddenly become a hub of hectic activity.

The reason behind the hustle and bustle is the industry’s desire to beat the SEBI-set deadline of August 1, when the rule comes into effect that will prevent investors being charged for investing in MF products -- irrespective of the mode of investment, direct (with fund house) or indirect (through distributor).

POWER QUOTIENT

Finance Minister Pranab Mukherjee presented a Budget that may be termed as popular, but it did not go down well with corporates and stock markets, which crashed phenomenally almost as soon as the trading community realised there was not going to be any big-bang pro-market reforms unveiled.

The focus was on farmers and the poor, aside from infrastructure.

Dhirendra Kumar

On the 18th of this month, two key changes were initiated in regulations governing mutual funds (MFs) in India. One, the Securities and Exchange Board of India (SEBI) abolished the practice of ‘entry load’ — the upfront sales commission — in MFs. And two, it was reported that the government would somewhat loosen the Know Your Customer (KYC) requirements for small investments made through the Systematic Investment Plan (SIP) route. Both of these are significant changes that will alter the fund investment landscape in the country.

By Dhirendra Kumar, VRO

After six months of anticipation, the Securities and Exchange Board of India's (SEBI) board meeting earlier today abolished entry load for investing in mutual funds. With this change, the business of selling funds will change fundamentally. The money that a fund distributor earns will now come almost completely from the so-called trail commission. This is the commission that the distributor receives from the fund house on a continuous basis while the money is invested.