Learning Objectives - Chapter 7

After studying this chapter, you will Understand:

• Fair Valuation Principles and relevance for investors

• Computation of Net Assets of mutual fund scheme
• Dividends & Distributable Reserves
• Concept of Entry and Exit Load and its impact on NAV
• Key accounting and reporting requirements applicable to mutual funds
• NAV, Total expense ratio and pricing of units for the Segregated Portfolio
Chapter 7: Net Asset Value, Total Expense Ratio & pricing Of Units
Fair Valuation Principles – are made by SEBI to ensure fair treatment to all investors including
existing investors as well as investors seeking to purchase or redeem units of mutual funds in all
schemes at any point of time. The 10 principles are listed below for your reference:

1. Valuation reflective of realizable value of securities

2. Board of AMC to identify methodologies for valuing securities
3. Securities consistently valued as per policies & procedures
4. Periodic review to ensure appropriateness
5. seek to address conflict of interest
6. Disclosure made in SID, website
7. Responsibility valuation & NAV on AMC
8. Detect & prevent incorrect valuation
9. Rationale for valuation
10.Prices of similar security at all available public platform
Valuation - of the securities held by MF schemes help to determine the NAV of the scheme in
accordance with the valuation guidelines as follows:

1. Traded Securities other than money market and debt securities must be valued at the last quoted closing price on the stock
exchange.

2. Non-traded Securities other than money market and debt securities is a security not traded on any stock exchange for a
period of 30 days prior to the valuation date.

3. Value of Gold must be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce
• gold having a fineness of 995.0 parts per thousand
• silver having a fineness of 999.0 parts per thousand

1. Valuation of perpetual bonds

• Additional Tier 1 and Tier 2 bonds are issued by banks and are perpetual in nature, also popularly known as AT 1 or AT 2
bonds.
• No mutual fund shall own more than 10% of such types of bonds issued by a single issuer. In addition, a mutual fund
scheme shall not invest more than 10% of its assets into such instruments. The scheme should also not invest more than
5% of its assets in such instruments of a single investor.
 Computation of Net Assets of mutual fund scheme
NAV - The net asset value (NAV) represents the net value of an entity and is calculated as the total value of the entity’s assets minus the total value of its
liabilities.

What are Net Assets in Mutual Fund Scheme?

• Net assets comprise the amounts originally invested plus the profits earned in the scheme as well as the appreciation in the investment portfolio.

What are Total Expenses in Mutual Fund Scheme?

• Investment and Advisory Fees - are charged to the scheme by the AMC.
Recurring Expenses – are charged for maintaining the portfolio, distributor commission, marketing, and other expenses
Max. expense ratio charged by different categories of open-ended schemes is as follows:

Daily Net Assets Equity Schemes Debt Schemes

First 500 cr 2.25 percent 2.00percent

Next 250 cr 2.00 percent 1.75 percent

Next 1250 cr 1.75percent 1.50 percent

Next 3000cr 1.6 percent 1.35 percent
Next 5000cr 1.5 percent 1.25 percent

Next 40000 cr reduction of 0.05% for every increase of INR 5,000cr

Balance 1.05 per cent 0.8 per cent
Close Ended & Interval Scheme - the maximum expense ratio charged to Equity schemes is
1.25% & for others is 1%

Index Fund Scheme Or Exchange Traded Fund - the maximum expense ratio charged is 1%.

Fund of Fund - the maximum expense ratio charged:

• To Equity schemes = 2.25%
• To Debt Schemes = 2%
• To liquid schemes, index fund scheme and exchange traded funds = 1%

• Brokerage and transaction cost are incurred for the purpose of execution of trade and is included in
the cost of investment to the extent of 0.12 percent for cash market transactions and 0.05 percent for
derivatives transactions.
• Mutual funds are also allowed to charge any additional expenses, incurred under the various heads of
permitted recurring expenses and investment and advisory fees, not exceeding 0.05 percent of daily
net assets of the scheme
Formula for calculating NAV is:
NAV= (Net Assets – Total Expenses)÷ No. of outstanding Units

Example 1: Calculate the NAV of a portfolio

If,
Value of stocks in a portfolio is INR 150cr
Value of bonds in a portfolio is INR 67cr
Value of money market instruments in a portfolio is INR 2.36cr
Dividend accrued but not received is INR 1.09cr
Interest accrued but not received is INR 2.68cr
Fees payable is INR 0.36cr
No. of outstanding units are 1.90cr

NAV = (Value of stocks + Value of bonds + Value of money market instruments + Dividend
accrued but not received + Interest accrued but not received – Fees payable) / No. of
outstanding units

NAV = (150 + 67 + 2.36 + 1.09 + 2.68 – 0.36) / 1.90 = 222.77 / 1.90 = Rs. 117.25
Concept of Entry and Exit Load and its impact on NAV
Difference between the Sale Price and NAV is called the “entry load”. If the NAV of a scheme was
Rs 11.00 per unit, and it were to charge entry load of 1 percent, the Sale Price would be Rs 11 + 1
percent on Rs 11 i.e., Rs 11.11. Since entry load is no longer permitted, the Sale Price is same as
the NAV.

The difference between the NAV and re-purchase Price is called the “exit load”. If the NAV of a
scheme is Rs. 11 per unit, and it were to charge exit load of 1 percent, the re-purchase Price would
be Rs. 11 – 1 percent on Rs. 11 i.e., Rs. 10.89.

NAV for Index fund, liquid & other debt funds is calculated up to 4 decimal places whereas in equity
and balanced funds NAV is calculated up to 2 decimal places.

Key Accounting and Reporting Requirements: Scheme accounts & AMC accounts should be
maintained separately, similarly the Scheme auditor & AMC auditors have to be separate
individuals.

Dividends & Distributable Reserves -dividends can be paid out of distributable reserves .
Dividend record date must be five calendar days from the issue of the notice by the AMC.
Learning Objectives- Chapter 8

After studying this chapter, you will understand:

• Applicability of taxes in respect of mutual funds
• Capital Gains
• Dividend Income
• Difference between dividend distribution tax and capital gains tax
• Setting off Gains and Losses under Income Tax Act
• Securities Transaction Tax
• Tax benefits under Section 80 C of Income Tax Act, 1961
• Tax Deducted at Source
Chapter 8 – Taxation

Interest, dividend and capital gains form the income of the mutual fund is exempt from income
tax, since mutual funds are constituted as trusts in India for the benefits of the unit-holders.
Section 10(23)(D) of the Income Tax Act exempts all the income earned by the mutual fund
schemes from any tax.

For the Income earned by the investor from investment in mutual fund units tax rates would
vary on the basis of:

1. Type of income: The capital gains are taxed differently in comparison to the dividend income. At the same time, within capital gains,
short term capital gains attract different tax rates in comparison to long term capital gains.
2. Type of mutual fund schemes: Income from equity-oriented mutual fund schemes(schemes holding more than 65 percent of the
assets under management in equity shares) is taxed at different rates in comparison to non-equity-oriented schemes. Fund-of-funds
investing in other equity mutual fund schemes is classified as a non-equity-oriented scheme for the purpose of income tax.
3. Type of investor: The tax treatment may differ for Resident Indian Investors, NRIs, and non-individual investors. It must be noted that
in case of joint holding, the income, be it capital gains or dividend, would be considered to have been earned by the first h older.
 Capital Gains
The difference between the purchase price of the units and the selling price of the units would be treated as capital
gain (or loss). If the selling price is higher than the purchase price, there is an incidence of capital gain, whereas if
the selling price is lower than the purchase price, there is a capital loss. The capital gains are subject to tax. Capital
gains tax is classified depending on the period of holding and the type of funds invested in.

Equity Funds Debt Funds

Capital Gains tax in Mutual Funds Fund Holding Period Tax % Fund Holding Period Tax %
Long Term Capital Gains More than 12 Months 10% On Gains More than 36 Months 20% after Indexation benefit
Short Term Capital Gains Less than 12 month holding 15% on Gains Less than 36 months As per investor's income tax slab

The two important provisions for equity asset class:

• Grandfathering of capital gains:
• Since the capital gains from equity assets were non-taxable till the announcement of the budget in 2018, a reintroduction of
the tax would have meant that even the gains earned till then would also become taxable. In order to avoid such a situation,
new clause was introduced called “grandfathering of the capital gains”.
• This meant that the capital gains earned till January 31, 2018 would not be taxable, which means that for all the equity
mutual funds that one has invested in, the valuation as on January 31, 2018 becomes the base point.
• Gains would be calculated for the purpose of tax by taking the higher of the purchase price or the NAV as on January 31,
2018.
• Exemption up to Rs. 1 lakh: In long-term capital gains arising out of equity shares and equity-oriented mutual
funds.
Indexation

Means the cost of purchase is adjusted upwards to reflect the impact of inflation. The Central Board of Direct taxes (CBDT)
every year announces a number, known as the Cost Inflation Index (CII). There is one index number for each financial year. Let
us see how it works through an example:

Assume that an investor invested a sum of Rs. 1,00,000 in a debt fund in the year 2015, and sold the same after 3 years. He
got Rs. 1,25,000 as the redemption proceeds. This was an investment return of roughly 7.72%.
Indexed cost of acquisition = Actual cost of acquisition X [CII in the year of sale / CII in the year of purchase]

In our example, indexed cost of acquisition = Rs. 1,00,000 X [280/254] = Rs. 1,10,236.221 The indexed capital gain would be
Rs. 14,763.78 (Rs, 1,25,000.00 – Rs. 1,10,236.22).The rate of tax on the indexed capital gains is 20 percent, and thus the tax
liability would be Rs. 2,952.76.

Dividend income

Dividend income from mutual funds used to be tax-free in the hands of the investor till March 2020. Earlier the dividend was
paid to the investor after the deduction of dividend distribution tax from the scheme itself. However now the dividend is
taxable in the hands of the investor at the applicable tax rate.
Securities Transaction Tax
STT is applicable only on redemption/switch to other schemes/sale of units of equity oriented mutual funds
whether sold on stock exchange or otherwise.
STT is not applicable on purchase of units of an equity scheme
STT applicability for Investors in Equity oriented Mutual funds

Transaction(MF)- STT Rates % Payable by

Purchase -Equity NIL Purchaser

Sale –Equity(delivery) 0.001 Seller

Sale –Equity(non-delivery) 0.025 Seller

Sale –Equity fund to MF 0.001 Seller

Stamp Duty on Mutual Fund units

• Stamp-duty is required to be paid for issue and transfer of Mutual Fund units with effect from
1 July 2020 as per the Indian Stamp Act in February 2019.
• Stamp duty @0.005% of the investment amount must be applicable at the time of issue of
units for both physical and de-mat units. Units will be allotted for the amount available post
deduction of stamp duty.

Stamp duty will be applicable to all transactions pertaining to scheme inflows:

• Purchase
• Additional Purchase
• Dividend reinvestment
• Systematic Investment Plan (SIP)
• Systematic Transfer Plan (STP)
• Income distribution cum capital withdrawal (Dividend) Transfer Plan (DTP )
 Individual Taxation
An individual is allowed to file tax as per the old or the new tax regime, the tax
slabs for an individual as per both regimes are listed below.

However in the old regime certain deductions are allowed they are listed on the
next page. If the net taxable income is below 5 lac then the individual will have to
pay zero tax, Above 5 lac as per the old tax slab.
 Deductions allowed as per old tax regime
DEDUCTION SECTION PARTICULARS MAX AMT
Standard Deductions Salaried & Pensioners 50,000
Deductions u/s 80 C Investments in PF, PPF, Life Ins., ELSS, NPS 150,000
Deductions 80 CCD - 1B Investments in NPS (50 K Maximum) 50,000
Deductions - 80 CCD - 2 Investments in NPS by Employer 10% of Basic +DA
Deductions u/s 80 D Health Premium (Self, Spouse & children) Aged < 60 years 25,000
Health Premium (Self, Spouse & children) Aged 60 & Above 50,000
Additional for Parents under
Health Premium If Parents age < 60 Years 25,000
Sec.80D
Health Premium If Parents age 60 & above 50,000
Deductions u/s 80 G Eligible Donations up to specified percentage 50% to 100%
Deductions u/s 80GG Payment of rent ( who do not receive HRA) 60,000
Deductions u/s 80 E Interest Paid on Education Loan Total Interest paid in the FY
Deductions u/s 80 TTA Interest Received on Savings Bank A/C 10,000
Interest Received from Bank or Post Office Deposits, for Senior
Deductions u/s 80TTB Citizens only
50,000

Tax Benefit u/s 24 Interest Paid On Home Loan (Max 2 L) 200,000

Setting off of Capital Gains and Losses under Income Tax Act
Provisions for setting off capital loss:
• Short term capital loss can be set off against short term capital gain or long- term capital gain.
• Long term capital loss can only be set off against long term capital gain.

Bonus Stripping
• Suppose an investor buys units of a scheme at Rs. 30. Thereafter, the scheme declares a 1:1 bonus issue i.e., the investor
receives 1 new unit, for every unit that was bought earlier. Logically, the NAV of the scheme will halve, and it is likely that
the units would now have a value of Rs. 15. At this stage, if the investor sells the original unit at Rs. 15, a loss of Rs 15 is
incurred [Rs 30 (original purchase price for the Units) minus Rs 15 (currently realized)].
• However, such capital loss is not available for setting off against capital gains, if the original units were bought within a
period of 3 months prior to the record date for the bonus issue and sold off within a period of 9 months after the record
date.
• In such cases, the capital loss will be treated as the cost of acquisition of the bonus units.

Tax Deducted at Source

• There is no TDS on redemption proceeds to resident investors. However, for certain cases of non-resident investments,
the same is applicable. In case of dividends from mutual fund schemes, even for resident Indians, TDS is applicable. The
tax is required to be deducted at 10 percent on the dividend amount if it exceeds Rs. 5,000.
• Further, Government of India has entered into Double Taxation Avoidance Agreements (DTAA) with several countries.
These agreements too, specify rates for Withholding Tax. The TDS applicable for non-resident investors is the lower of
the rate specified in the income tax regulations or the tax specified in the DTAA of the country where the investor is
resident.
Learning Objectives
After studying this chapter,–you
Chapter 9
will Understand:
• New Fund Offer Process
• NFO price and on-going price for subscription of mutual fund schemes
• Investment Plans and Options
• Allotment of mutual fund units to investors
• Content and periodicity of Statement of Account
• Mutual Fund Investor
• Application form of mutual funds
• Financial Transactions in mutual funds through online and physical mechanism
• Cut-off timing and Time stamping
• KYC requirements for mutual fund investors
• Different types of systematic transactions
• Operational aspects of Systematic Transactions
• Process of Non-Financial Transactions in Mutual Funds
• Change in Status of Special Investor Categories
• Investor transactions – turnaround times
The NFO process - Units in a mutual fund scheme are offered to investors for the first time through a New
Fund Offer (NFO). Interest to be paid @ 15% p.a for delayed refund to the investor charged to AMC.Open-
ended schemes - re-open in 5 business days of allotment.

Investment Plans and Services

Direct and Regular Plans - Each mutual fund offers two plans to the investors, regular plan and direct plan.
In direct plan no commission is paid to the distributor so expense ratio is lower.

Options within a scheme having the same portfolio are as follows:

1. Income Distribution cum capital withdrawal (Dividend) Pay-out option - the fund declares a dividend &
the NAV of the units falls to that extent. reduced NAV, after a Pay-out of Income Distribution cum capital
withdrawal, is called ex-Dividend NAV. The investor receives the dividend in his bank account & the
number of units held by the investor does not change.
2. Income Distribution cum capital withdrawal (Dividend) Re-Investment - the investor does not receive
the dividend in his bank account. The amount is re- invested in the same scheme and additional units are
allotted to the investor. The reinvestment happens at the ex-dividend NAV. Thus, if dividend is Rs. 2 per
unit on a Unit- holder’s 100 units, the dividend would amount to Rs. 200. Assuming the ex-dividend NAV
of the scheme is Rs. 20, then Rs. 200 ÷ Rs. 20 i.e., 10 units will be added to the unit-holder’s portfolio.
3.Growth Option - dividend is not declared. The NAV captures the full value of the portfolio gains.
Services provided by Mutual Funds & Timelines
Service provided by Mutual Funds Turnaround Time

NAV Calculation and disclosure On a daily basis

Mutual Fund Schemes (other than IPO of ELSS) to remain open
Maximum 15 days
for subscription

Mutual Fund Schemes to allot units or refund money Within 5 business days of closure of NFOs

Re-opening for ongoing sale/re-purchase of open-ended Within 5 business days of allotment

scheme (other than ELSS)
Open ended schemes - within 5 working days of the receipt of
request.
Unit certificate
Close ended schemes - within 2 working days of the receipt of
the request.
Dispatch of Dividend warrants to investors Within 15 days of declaration of the dividend
Dispatch of Redemption/re-purchase cheques to investors Within 10 working days from the date of receipt of transaction
request.

Scheme-wise Annual Report Four months from the date of closure of the account

Statement of portfolio for unit holders Before the expiry of 10 days from the close of each half year

Half Yearly Disclosures on mutual fund website Within 1 month from the close of each half year

A Consolidated Account Statement (CAS) by post/email. CAS for each calendar month
CAS for half year
Who can invest in mutual funds?
1. Individual Investors
• Resident Indian individuals - can invest in Mutual Funds, either individually or jointly (not exceeding three names), Minors(need to invest through their
guardians), Hindu Undivided Families (HUFs) can also invest in MF.
• Non-Resident Indians (NRIs) – A persons of Indian Origin (PIO) resident abroad can invest in MF.
• Foreign investors - can invest in MF

1. Non-individual Investors - investments are made by organizations / institutions. Types of non-individual investors:
• Companies / corporate bodies, registered in India
• Registered Societies and Co-operative Societies
• Trustees of Religious and Charitable Trusts
• Trustees of private trusts
• Partner(s) of Partnership Firms
• Association of Persons or Body of Individuals, whether incorporated or not
• Banks (including Co-operative Banks and Regional Rural Banks),Financial Institutions and Investment Institutions
• Other Mutual Funds registered with SEBI
• Foreign Portfolio Investors registered with SEBI
• International Multilateral Agencies approved by the Government of India
• Army/Navy/Air Force, Para-Military Units and other eligible institutions
• Scientific and Industrial Research Organizations
• Universities and Educational Institutions Foreign portfolio investors can invest in equity and debt schemes of Mutual Funds through two routes:
• Direct route
• Indirect route
Status of the Holder and Mode of Holding - Once a mutual fund folio is created as a jointly held
account there can be no change in the joint holders. A joint holder cannot be deleted or a new
one added, except in the event of death can a name be deleted .

• FATCA and CRS Details - For applicants, including guardians, whose country of birth/citizenship/nationality/tax residency
is other than India, the application requires additional information under Foreign Account Tax Compliance Act (FATCA)
and Common Reporting Standards (CRS).
• Bank Account Details - It is mandatory for investors to provide the bank details of the sole/first holder of the folio in the
application form.
• Nomination -The applicant can make a nomination in favour of a maximum of three nominees and indicate the
percentage to each nominee.
• Financial transaction in mutual funds include purchase of mutual fund units (initial purchase in an NFO and additional
purchases in an ongoing offer), redemptions Units will be redeemed on the basis of First-in-First-Out (FIFO) .
• Acceptable modes of payments for MF are through online transactions or different payment mechanisms such as
cheque, demand draft and cash etc.
• One-Time Mandate (OTM) is a payment facility that investors can use to authorize their bank to process debits to their
specified bank account raised by a specified mutual fund for purchase of units. The debits happen through the National
Automated Clearing House (NACH). It eliminates the need for the investor to initiate payment every time a purchase
transaction is conducted.
 Cut-off Time and
Type of Scheme Time Cut
Transaction Stamping
off time Applicable NAV

Equity oriented
Purchases and Switch NAV of the business day on which the funds are available for
funds and debt funds 3.00 pm
ins utilization
(except liquid funds).

• If funds are available for utilization before the cut-off time,

closing NAV of the day immediately preceding the day of
the receipt of application is applicable.
• If application received after cut off time on a day and funds
1.30 pm are available for utilization on the same day , closing NAV
Purchases and Switch
Liquid fund of the day immediately preceding the next business day is
ins
applicable.
• Irrespective of the time of receipt of applications, where
the funds are not available for utilization before the cut-off
time, closing NAV of the day immediately preceding the
day on which the funds are available for utilization.

Equity oriented • Same day NAV if received before cut off time.
Redemptions and
funds and debt funds 3.00pm • Next business day NAV for applications received after cut
Switch outs
(except liquid funds). off time.

• NAV of day immediately preceding the next business day, if

Redemptions and 3.00 pm received before cut off time.
Liquid funds
Switch outs • Next business day NAV for applications received after cut
off time.
• Time Stamping –Time stamping machine stamps the Mf purchase or redemption application with
automatically generated location code, machine identifier, serial number, date and time. Similarly,
applications for non-financial transactions like the change of address, and investor’s acknowledgement
are stamped. However, here stamping of time is not relevant; the date stamping is pertinent. For online
transactions, the time as per the web server to which the instruction goes is used in determining
the NAV for sale/re-purchase transactions.

• KYC Requirements for Mutual Fund Investors -The KYC process involves establishing the
identity (PAN Card) and address(Aadhaar card, ) of the investor can be done online or through
physical form

• KYC Registration Agencies (KRA)

• Centralized KYC Registration Agencies Once a capital market intermediary has performed an
In-Person Verification (IPV) of the investor and other documentation requirements are in place,
and the intermediary uploads the investor’s data to the database of a KRA, the KYC is valid
across the capital market. Government of India authorized the Central Registry of Securitization
and Asset Reconstruction and Security Interest of India (CERSAI) to act as and to perform the
functions of the Central KYC Record Registry
 Systematic Transactions

Systematic transactions, such as systematic investments, withdrawals and transfers, enable

periodic investments and withdrawals that investors can align to the available investible surplus,
need for regular funds or rebalancing the investments to manage risks.

• Instant Access Facility

• IAF facilitates credit of redemption proceeds in the bank account of the investor on the
same day of the redemption request. The MFs/AMCs can offer IAF only in Liquid
schemes of the mutual fund. The monetary limit under the IAF is Rs. 50,000 or 90
percent of the latest value of an investment in the scheme, whichever is lower
 Systematic Investment Plan (SIP) - SIP is an approach where
the investor invests constant amounts at regular intervals

Why invest in SIP?

✓ Automatically buys more units when the price is down
✓ Automatically buys less units when the price is up
✓ Over time the market fluctuations are averaged
✓ Most likely you will realize a saving on the cost per unit
✓ This increases the chances of BETTER RETURNS

Month Amount Invetsed Rising Market Falling Market Volatile Market

NAV Units NAV Units NAV Units
1 1000 10 100.00 10 100.00 10 100.00
2 1000 12 83.33 8 125.00 12 83.33
3 1000 14 71.43 6 166.67 8 125.00
4 1000 16 62.50 4 250.00 10 100.00
Total 4000 52 317.26 28 641.67 40 408.33
Average Purchase Price 13 7 10
Average Cost Per Unit 12.61 6.23 9.80
Systematic Withdrawal Plan (SWP) allows an investor to withdraw an amount from their investments
periodically.
Example - Investor invests lump sum Rs 10.00 lacs in a mutual fund scheme Rs 20 NAV . Let us assume
investor started a monthly SWP of Rs 6,000 after one year from the investment date, just to avoid exit loads.
This process continues every month till the end of the SWP period chosen by the investor.

Systematic Transfer Plan (STP)- The amount that is withdrawn from a scheme (called the source
scheme) is re-invested in some other scheme (called the target scheme) of the same mutual
fund.
Example- Mr. x invests a lump sum amount of Rs 12 lakhs in a liquid fund opting for STP in an equity mutual fund.
Amount invested Rs 12 lakhs
Source Fund Liquid Fund
Target Fund Equity Fund
Frequency Monthly for 2yr
Fixed amount Rs 50,000p.m
Balance Day1

In year 1, Rs 6 lakhs will be invested in the equity fund and Rs 6 lakhs will stay invested in the
liquid fund.
In year 2, another Rs 6 lakhs will be invested in the equity and no amount in the liquid fund. The entire Rs 12 lakhs will stay
invested in the equity fund.
Switch - is a redemption from one scheme and a purchase into another combined into one transaction.

SIP Top-up Facility - helps to increase the SIP amount at intervals chosen by them. The increase can be of a
fixed amount or a percentage of the existing SIP amount

Triggers - A date trigger instructs the mutual fund to redeem the units specified on a particular date . The
investor could set a stop-loss trigger by identifying the level of the NAV or the percentage depreciation in the
value of the investment at which the investment should be redeemed .

Pledge/Lien of Units -Banks, NBFCs and other financiers often lend money against the pledge of Units by the
Unit-holder

Change in Bank Account Details - Investors can register up to five bank accounts with a mutual fund for
individual investors and 10 for non-individuals

Transmission of units - In a mutual fund folio , if the first holder passes away, the second holder is
substituted as the first holder. In a singly held folio with nominations, the units are transferred to the
nominee. If a folio is jointly held and has nominations, the right of the joint holder will take precedence.