Readers' Corner: Mutual Fund

Nimesh Shah, managing director & chief executive officer, ICICI Prudential Asset Management Company, answers your questions

I want to discontinue my Systematic Investment Plan (SIP) for some time but not withdraw the funds, as I might restart it. Is this possible?

If you know beforehand that you will be unable to pay SIP installment(s) for a/certain month(s), you can take a pause for your SIP investments through the 'SIP Pause' option.

This option will only pause the SIP for the specific period opted and will restart automatically once the pause period is over.

I recently discovered I had invested in a fund five or six years ago. I had forgotten about it all this while. For withdrawing the money, what kind of documents will I have to show as proof?

For redemption, you will need your folio number or Permanent Account Number (PAN). Redemptions can be done either through the online mode (through online investment facility provided by asset management companies (AMCs) or offline mode (through any financial intermediary or directly walking to any of the investor service centres/ branch of the asset management company). In an online facility, you can visit the website of the AMC, provide the necessary information and go ahead with redemption. For offline transactions, a redemption slip has to be filled at the investor service centre of the AMC or through financial intermediaries like independent financial advisors, or through any other mode as assigned by the AMC.

I recently started working and I want to invest in mutual funds (MFs). How many funds should I invest in? What funds should I choose?

Investing in MFs offers the benefit of professional management and diversification at a lower cost. By starting your investment program early in your life, you are allowing your money to compound for a longer period and, hence, can end up creating wealth over your lifetime. In your case, we are assuming your major requirement would be to build a portfolio to achieve long-term financial goals. This can be done by investing a credible portion of your investments into equities. If your objective is to derive the twin benefits of tax exemption under Section 80C and growth from equities, you can consider investing in an equity-linked saving scheme. You could also consider investing in multi-cap and large-cap funds with a good track record through SIPs and SIP top-up.

The views expressed are expert's own. Send your queries to yourmoney@bsmail.in