Understanding Mutual Fund Statement of Account

Published On: 30-Jul-2019

Mutual funds have been emerging as a preferred investment option across the asset classes, including equity, debt, and gold. However, just like it is important to invest, it is equally important to periodically review the investments. Taking the first step in that direction, you refer your Statement of Account, which will help you know the details of your investments and many other vital details. If you are just wondering, what is statement of account and how to read it for informed investment decisions, this article precisely aims to ease your life in that regard. 

Understanding  Mutual Fund Statement of Account


What is a Statement of Account?

A statement of account is the summary statement shared by the mutual fund house with respect to your investments with them. The mutual funds usually provide it when the investor makes any transaction with the mutual fund house, be it an investment transaction or a redemption transaction. Mutual Funds also provide it when there is no transaction for the period of 6 months. However, with the introduction of Consolidated Account Statement (CAS), the issuance of Statement of Account by the Mutual Funds has been limited to the investors to whom the CAS is not issued.

How to read Mutual Fund Account Statement?

A mutual fund account statement typically contains the following information:

  1. Folio Number – The folio number is the unique identification number with the mutual fund. It serves the same purpose as your bank account number when you open an account with a commercial bank. Your folio number helps the mutual fund house identify your transactions with them. If you are making a new investment with a mutual fund where you hold an investment, and you don’t tell them that you are an existing investor, they will open a new folio for you to evidence the new transaction. 

  2. Investor Details – The statement is addressed to the investor, who is registered as the first holder for the investments in the mutual fund records. Apart from the name, it also shows the name of other holders, address (as per KYC Records), contact details, date of birth (either registered or not), investor category, and mode of holding (whether single / joint or Anyone or Survivor).

  3. PAN and KYC Status – Apart from demographic details, PAN (Permanent Account Number) in masked form of the investor along with the KYC (Know Your Customer) status is also reflected in the account statement.  KYC status shown as ‘Complied’/ ‘Verified’/ ‘Completed’ enables the investor to undertake mutual fund investments without any restriction. In the absence of the KYC Completion, the investor cannot make additional purchases   in respect of mutual funds. 

  4. Bank Details – The account statement also shows your bank details, including the bank name, masked account number, and IFS code. It is crucial to verify your bank details before you make a redemption transaction since the redemption proceeds are credited to the bank account electronically or sent through a cheque with pre-printed account details.

  5. Transaction Details – Your statement of account will also reflect your recent transaction details, which will help you stay informed about your transaction including the scheme name, the amount invested / redeemed, transaction NAV (including applicable exit load, if any), units redeemed or switched , etc. While the default statement of account shared by the fund houses will generally contain the most recent 3-5 transactions, you may also request an account statement for a specified period. Such a customized statement will be useful to make a summary of your investments, your returns, capital gains, etc. 

  6. SIP Details – The account statement also contains the details of your existing SIP details, including the scheme name, SIP amount, the start date, and the end date..  

  7. Portfolio Valuation – A statement of account will also help you with the current portfolio valuation, which will reflect the cost of existing investments scheme-wise and the current valuation thereof. This may help the investors calculate the overall returns from the schemes and thus, take a decision on continuing with the investments or exiting the underperforming scheme. 

  8. Scheme Load Details – The statement of account shows a summary of the schemes where the investment has been made, which will include the exit load details as well. Knowing this will help the investors know the load implications for the scheme so invested and understanding the impact of such load on the currently proposed redemption transaction. However, it may be noted here, the load structure printed in the Statement of Account is applicable on the date of issue of Statement of Account. The load structre applicable at the time of investment will continue to be applicable for the investment till the investor redeems all units.

  9. Nearest Investor Service Centre – Depending upon the registered address with the mutual fund, the statement of account will show the nearest investor service center to the investor, so that the investor may perform any desired transaction by personally visiting that office. While most of the transactions may now be performed online, this information helps the not-so-tech-savvy investors stay informed about the nearest office where the transaction may be completed. 

So, the next time you get an account statement make sure you may it thoroughly and stay informed about your existing investments.