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Readers' Corner: Mutual Fund

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

Readers' Corner

Nimesh Shah 

If the funds I am investing in are giving lower returns than other funds, should I be worried? Should I shift to other funds? What parameters should I compare to judge my funds’ performance?

One should always compare a fund’s performance against its benchmark. If the existing schemes are not performing well, one should take a look at the pedigree of the fund house, investment philosophy and long-term performance record. Also, experience and background of the fund management team.

Everyone says one should invest in equities for the long term. How does this principle work in the case of mutual funds (MFs)? Is the fund manager not buying and selling shares constantly?

MFs are well-regulated investment tools, offering the benefits of professional management, diversification and low cost. The point of investing in an MF is to leave the function to professionals. Fund managers buy and sell scheme holdings, depending on their view of the company, macros and other factors affecting an investment decision. They have a high level of educational and professional credentials and appropriate investment managerial experience. And, supported by a robust research team to help them make the right decision for investors.

I started a systematic investment plan (SIP ) in an equity-linked savings scheme (ELSS) about three years ago. I want to redeem it now. Can I withdraw the entire amount in one go?

In the case of SIPs, each instalment is treated as a separate investment and will have a three-year lock-in period from the date of investment. If you wish to redeem from the ELSS investment, you may request a copy of your account statement to find the clear units and redeem these.

This can be done either online (through the facility provided by the AMC) or offline (through any financial intermediary or directly at any branch of the MF or investor centres). For the online facility, one can visit the website, provide necessary information and go ahead with redemption.

For offline redemptions, a redemption slip has to be filled at the branch of an AMC or through financial intermediaries like independent financial advisors, brokerage firms, third-party distributors or banks.

The views expressed are expert’s own. Send your queries to

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First Published: Sun, April 24 2016. 22:12 IST