Taxation: Nimesh Shah

My mutual fund portfolio has made some gains. I would like to redeem some of these and put the money in fixed deposits. How do I choose which funds to redeem?
Mutual funds (MFs) offer the benefits of diversification, professional management and long-term wealth creation at a nominal charge. In the long term, MFs have the potential to outperform traditional fixed return instruments. Given the information, in case you are not in dire need of funds, we recommend you stay invested and further build your wealth with MF investments.

I have been investing in mutual funds for almost 10 years. Now, my agent tells me to furnish details under know-your-customer (KYC). Why should I do it after so many years?
You are investing in a well-regulated and transparent product. Over the years, the regulatory landscape has evolved and KYC is an important regulatory requirement, to prevent money laundering. It is a one-time exercise and we recommend you to become KYC-compliant for further investments.

I've been investing in six funds, both equity and debt. I want to increase the amount. Should I invest in new funds or increase the amount in these?
While it is a good decision to increase allocation towards mutual funds, you need to keep track of your current mutual fund investments. Evaluate the long-term performance record, reputation and investment philosophy of the fund house to decide whether to allocate incrementally towards your current MF investments or not.

As for new fund offers (NFOs), these launches are a means to offer a wider choice of investment themes to the investors. If the NFO offers a new asset class, a compelling investment strategy, or a flavour that would add value to your portfolio, it is a good idea to take the route. An offering is distinct from existing schemes in your portfolio and contributes towards building a comprehensive portfolio should be considered.

The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
Today, Nimesh Shah, managing director and CEO, ICICI Prudential AMC, answers your questions