Mutual Fund: Nimesh Shah

Suppose I physically give a cheque to invest in a scheme. Will I get the units with the same day's NAV (net asset value)? What is the cut-off time within which to invest? Is the process any different if the transaction is done online?
If you give a valid application up to the cut-off time with an amount less than Rs 2 lakh, along with a local cheque or a demand draft payable at par at the place where the application is received, the closing NAV of the day on which application is received shall be applicable. If the amount is more than Rs 2 lakh, the closing NAV of the day on which the funds are available for utilisation shall apply.

The cut-off time for transaction of all schemes, except liquid schemes is 3 pm. In respect of valid applications after the cut-off time, the closing NAV of the next business day shall apply.

For liquid schemes, the cut-off time is 2 pm and the funds should be available before the cut-off time, to qualify for the closing NAV of the business day immediately preceding the day of receipt of the application.In case of online transactions, the cut off time remains the same.

I am investing Rs 20,000 every month through systematic investment plan (SIP) in six mutual funds. I want to increase the amount by Rs 10,000.Should I increase in the funds that I am investing in or invest in new funds?

It is a good decision to invest through SIPs in mutual funds. SIP is a preferred tool to help you build an investment corpus for long term. Ideally, you should limit your investments to five-six well performing MF schemes.

Since you have not shared the names of schemes you are invested in, we assume these schemes have a good record. In which case, you could increase your allocation to existing schemes.

If existing schemes are not performing well, while selecting a new scheme, take a look at the pedigree of the fund house, investment philosophy and long-term performance record. Also, look at the experience and background of the team that would be managing the scheme.

I have so far invested only in large-cap funds since my advisor said those are safe. But I am reading that mid-cap and small-cap stocks are also giving good returns. Is it a good time to invest in mid-cap and small-cap funds?
In a rising market, mid-caps fare better, while in a falling market, they fall more. Equity as such is a volatile asset class and mid-caps are even more volatile. Having said that, you can manage the volatility by increasing the time frame for which you are investing. If you have a three-year horizon you are better off investing in large-cap funds. For longer investment horizons you should look at investing in mid-cap funds. The key is to identify prudently managed mid-cap funds. In the current market situation, we have a bias towards the large-cap category, since the mid-caps have run up a bit.

The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in
Nimesh Shah, MD & CEO, ICICI Prudential Asset Management Company, answers your questions