Understanding Mutual Funds

Mutual Funds can meet the investment objectives of almost all types of investors. Younger investors who are willing to take some risk while aiming for substantial growth of capital in the long-term will find equity schemes (i.e. funds which invest in stocks) an ideal option.

Older investors who are risk-averse and prefer a steady income in the medium-term can invest in debt income schemes (i.e. funds which invest in debt instruments). Middle-age investors can allocate their savings between income funds and equity funds and achieve both income and capital growth. Investors who want to benefit from regular savings can put aside a small sum every month in a Systematic Investment Plan.
 

Net Asset Value is the market value of the assets of a scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.

Purchase Price is the price an investor pays when investing in a scheme. It is also called as the Offer Price.

It is the price at which Open-Ended schemes repurchase their units and Close-Ended schemes redeem their units on maturity. Such prices are NAV related.

Exit Load is a charge collected by a scheme when it buys back the units from unit-holders. It is also called as "Repurchase Load". Exit load is applicable for a specific period from the time of purchase (as specified from time to time), and beyond this period, no exit load is applicable on redemption.

The Scheme Information Document contains the details of the scheme that the AMC or sponsor prepares for and circulates to the prospective investors, inviting subscription to the units of the Scheme(s).

The Statement of Additional Information contains details of Principal Mutual Fund including its constitution, certain tax, legal and general information and legally forms a part of the Scheme Information Document.

The Scheme Information Document & Statement of Additional Information is the most important source of information from the perspective of a new or prospective investor.

Contents of Scheme Information Document & Statement of Additional Information -

Scheme Information Document inter alia shall include the following information:

1. Description of the Scheme and the investment objective/strategy
2. Terms of Issue
3. Investor's Rights and Services
4. Risk Factors and other information relevant to the Scheme.

Statement of Additional Information shall include the following information:

1. Constitution of the Mutual Fund
2. Details of Directors / Key Personnel / Service Providers
3. Historical Statistics
4. Accounting / Valuation norms
5. Taxation implications

Application forms are usually available at all Mutual Fund branch locations and at the Registrar Branch locations where the Mutual Fund operates. On request, the application could be sent by e-mail to the customer or by courier. Application forms are also available online -- under the downloads section on the website. The customer has to take a print of the application form, fill in the details and submit it at the nearest Investor Service Centre.

Download Application Forms for Principal Mutual Fund.

Instructions to fill in your Application Form.

Locate your nearest Principal Mutual Fund Investor Service Centre.

Cut-off timing is the time before when an investor must submit / lodge his / her application form for the date of submission / lodgement to be considered as the transaction date. For applications submitted / lodged after the cut-off time the applicable transaction date is the next business day. Depending on the transaction date the NAV is applicable.

The Current Value of Investment is the 'Market Value' of the Investment based on that day's NAV of the Investment in which the Scheme is invested Scheme - Plan of a Mutual Fund.

On all business days, depending on the scheme type, NAV is declared in the evening at or before 9 pm.

Once you make an Investment with a selected Mutual Fund a transaction confirmation will be sent to you through E-mail /SMS within 5 business days from the date of receipt of application. As per SEBI requirements, a Consolidated Account Statement for the transactions across all the Mutual Funds, will be dispatched to the investor on, or, before 10 days from the end of the succeeding month through email (if the same has been provided) or physical copy. However, in case you still need an account statement, you can send a mail request to customer@principalindia.com.

Track your application/transaction status online.

Once you make an Investment with a selected Mutual Fund, a transaction confirmation through E-mail/SMS should reach you within 5 business days of the transaction date. In case of Redemption Warrants -- the Warrants should be dispatched to you within 10 business days from the date of transaction, and in case of dividend, it shall be dispatched within 30 days from the record date.

If the documents do not reach you, you can approach the nearest Investor Service Centre or send an email to the customer care of the respective fund or call up the toll-free number of the concerned Mutual Fund to find out the details regarding the delay in receiving the above-mentioned documents.

If you register for our 'online services' you could obtain all such details from this website.

Register for Principal Mutual Fund Online Services.

Write to our Customer Care: customer@principalindia.com

Call us on our Toll-free number: 1800 425 5600

The Investor needs to fill in the redemption application, which is usually available in the footnote of the account statement. Further, it needs to be signed by all the account holders in case the mode of holding is "joint". In case the mode of holding is "any one or survivor", the application can be duly signed by any one of the account holders. The duly filled in application form must be sent to the nearest Investor Service Centre. Once the application form is received, the units shall be redeemed at the redemption price applicable for the transaction date on which the application was received at the Investor Service Centre. In case your application is received after the cut-off time, the applicable transaction date would be the next business day.

If you register for our online services, you could redeem your units electronically.
 

Systematic Investment Plan (SIP) is a simple, time-honored strategy designed to help investors accumulate wealth in a disciplined manner over the long-term and plan a better future. This disciplined approach to investing also provides following benefits:

Power of Compounding
Rupee Cost Averaging
Convenience

Know more about SIP (Systematic Investment Plan)

Rupee Cost Averaging does not produce sudden, dramatic profits but generates sustained growth over the long term despite short-term fluctuations in the market. Opting for a Systematic Investment Plan for a Mutual Fund Scheme gives investors the advantage of Rupee Cost Averaging.

Know more about Rupee Cost Averaging

When an investor has an account in a designated direct credit bank for a specific Mutual Fund, based on a redemption request, the redemption proceeds can be credited directly to the investor’s bank account. Please note that the procedure for direct credit may vary from fund to fund.

The following documents are to be submitted along with the purchase application depending on the legal status of the applicant as mentioned in the application form.

Every person shall quote his or her PAN and enclose the KYC acknowledgement letter issued by the KYC Registration Agency for all investments irrespective of amount involved for purchase of its units, including fresh/additional purchase, switch, Systematic Investment / Transfer.

Click here for documents required to accompany your investment applications in Principal Mutual Fund.

Special instructions for non-resident investors:

On Repatriation Basis: 
In case Indian rupee drafts are purchased abroad or payment is made from debit to NRE / FCNR account, an account debit certificate from the bank issuing the draft confirming the debit.

On Non-Repatriation Basis: 
In case Indian rupee drafts are purchased abroad or from FCNR / NRE account an account debit certificate from the bank issuing the draft confirming the debit shall be enclosed along with the application form

For subscriptions amounts remitted out of debit to the FCNR / NRE account the Application form must be accompanied with a Foreign Inward Remittance Certificate (FIRC), issued by the investor’s bankers