Understanding the key terms in your mutual fund statement

A mutual fund statement also known as consolidated account statement (CAS) contains a summary of all investments made with a specific fund house across several schemes. It also provides investors with details of their holdings, transactions, fund performance, fees, and other important information related to their mutual fund investments.

In this article, we discuss what to read in mutual fund statement and they key terms in mutual fund statement.

• Table of contents

1. Mutual fund statement overview
2. Key terms in your mutual fund statement explained
3. How to interpret your mutual fund statement
4. Why regularly review your mutual fund statement?

Mutual fund statement overview

Investors get a bird’s eye view of their mutual fund holdings with the help of a mutual fund statement. You can see how your investments have performed over time, the asset allocation details, associated expenses etc. Also, mutual fund statements are important for tax purposes as they allow you to report your investment income (including dividends) and capital gains correctly.

Additionally, mutual fund statements may also provide market updates, definitions of key investing concepts, and performance indicators. Investors can use this data to better grasp the basics of investing and make well-informed investment decisions.

Let’s check out the things to read in mutual fund statement.

Key terms in your mutual fund statement explained

• Folio number: Each investor has a unique folio number that is provided by the fund house. This number serves to identify your specific portfolio.
• Personal details: Your complete name, mailing address, phone number, email address, birth date, and investor category will be shown under “personal details” of the mutual fund statement. This part also includes your PAN number.
• Nomination: A nominee is someone you have designated to receive your mutual fund investment in the event of your demise. The section on nominations will indicate whether you have chosen a nominee. If you haven't already added a nominee, please do so as soon as possible. Having a nominee facilitates the smooth transfer of assets in the event of an unfortunate event.
• Details about the advisor or distributor: The advisor or distributor's name and Application Reference Number (ARN) are shown under the advisor or distributor details.
• Bank information: This section includes information about your bank account, such as the name of the bank, the IFSC code, and your account number.
• Transaction details: The statement lists all transactions within the specified period, including purchases, redemptions, exchanges, and any dividends or capital gains distributions received. Each transaction is typically accompanied by the date, amount, and type of transaction.
• Performance summary: Includes the fund's total return for the period, which reflects changes in the fund's NAV price plus any distributions made to investors.
• Asset allocation: Some mutual fund statements provide a breakdown of the portfolio's asset allocation, showing the percentage of assets invested in different asset classes such as stocks, bonds, cash, and other securities.
• Fees/expenses: Include management fees, operating expenses, sales charges (if applicable), and other costs deducted from the investor's account.

How to interpret your mutual fund statement

Your mutual fund statement gives you a list of information related to your investment. To read a statement, start with the summary section to check key details like account balance and performance. Then, check your purchase and redemption transactions, portfolio value and other charges.

Ensure no discrepancies or errors in the statement and analyse the statement to track investment performance and make informed decisions.

Why regularly review your mutual fund statement?

Regularly reviewing your mutual fund statement is important because it helps or guides you in doing the following:

1. Track performance: Monitor your investments' performance over time and compare returns with the benchmark and your investment goals. Through this, you can Identify if any funds in your portfolio are underperforming and might need reassessment.
2. Verify accuracy: Ensure the correctness of all transactions (purchases, redemptions, dividends). Report any discrepancies to the fund house.
3. Rebalance your portfolio: Adjust investments to maintain the target asset allocation after market fluctuations.
4. Identify tax implications: Track capital gains and losses for tax planning and reduce tax outflow if possible.
5. Stay informed: Be updated on changes in fund management, investment objectives, or expense ratios.
6. Make informed decisions: Based on performance and financial changes, decide on switching funds, increasing contributions, or redeeming investments.
7. Maintain discipline: Regular reviews help avoid impulsive decisions and stay committed to your investment strategy.

Conclusion

Reading and interpreting mutual fund statements is key to investing in mutual funds. Knowing the right terminology can enable you to make educated decisions related to investments. Mutual fund statements are invaluable for investors to track the performance of their investments, monitor their portfolio holdings, and stay informed about any changes or developments.

FAQs

What should I do if I don't understand a term in my mutual fund statement?

If you come across a new phrase in your mutual fund statement, look it up using reputable financial resources or contact your fund provider for clarification. Understanding every facet of your investment is critical for making educated decisions.

What should I do if I notice an error in my mutual fund statement?

If you notice an error in your mutual fund statement, carefully review all details such as personal information, transaction history, and holdings. Contact the appropriate channel, such as the AMC, distributor, or online platform, providing necessary information like your folio and PAN number. Document your communication and follow up if the issue isn't resolved.

How often are mutual fund statements updated?

Consolidated account statements for mutual funds are typically generated monthly.

Can I access my mutual fund statement online?

You can typically access your mutual fund statements online through AMCs' websites, investment platforms, or distributor portals. You can also access consolidated account statements, which represent all mutual fund holdings across companies registered against your name, through the websites of registrar and transfer agents CAMS or Kfintech.

What is the difference between NAV and Fund Value in the statement?

NAV (Net Asset Value) is the per-unit value of a mutual fund, calculated daily by dividing the fund's assets minus liabilities by the number of outstanding units. Fund value is the total worth of your investment, calculated by multiplying the units you hold by the NAV. Changes in NAV directly affect your holdings' value.

Why is the folio number important?

The folio number is a unique identifier for your investment account within a mutual fund scheme. It helps track investments, process transactions like redemptions or purchases, and facilitates customer service inquiries. It is essential for managing your investments and claiming benefits or dividends from the fund.

How to get MF statement using pan number?

You can access your mutual fund statements using your PAN number through the asset management company that manages the fund or through websites of RTAs such as CAMs and KFintech.

How can I download an SIP statement online?

You can view your transaction history on your statement of account online through AMCs' websites and RTA websites. If you have invested through an aggregator platform, you may be able to access your statement there too.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.