MF accounts: Making a statement

In our last column we took a peek in to the Statement of Accounts (SOA) mailed to you by a mutual fund house. We discussed the difference between an SOA and a bank statement and some of the information that the statement contains. This week, we look at further details that appear in a SOA including the format in which your holdings — units, their value and dividends received are presented.

On the right side of the SOA, you will find the following details:

The contact address and contact number of the registrar and below that, the information of the mode of holding, your PAN, whether you are KYC compliant or not, your bank details – the name, branch and account number, redemption payout mode, investment details.

You could have investments in several schemes floated by a particular MF; the SOA will also give you scheme-wise listing of the unit balances. SOAs also give the ISIN (International Securities identification number) where the scheme is listed in the exchanges. Statements also give your DP and client IDs if it is mentioned in the application form.

What are the different columns?

Opening balance: If the statement is taken for a specified period, for example from March 1 to March 31 2011 but there were transactions made prior to that period, then the units before the specified period is brought in as opening balance.

Column number 1 is the date of your transaction – the day you have made a purchase or redemption; the applicable business day based on which the NAV / Price is applied on the transaction.

Column 2 gives the description of whether it is a subscription or redemption or any other type of transaction.

Whenever a dividend is given, the description would indicate the transaction; for example dividend payout @ Re 3 per unit. This means you multiply the units that you hold by three and that would give you the dividends that is paid. If it is a reinvestment, then the narration would be: dividend reinvested and the amount of eligible dividend is treated as a subscription and units will be allotted for the dividend. This means that the number of units in your account would increase to that extent. Dividends are reinvested at a price / NAV after the dividend is declared (ex-dividend NAV) which would be lower than the NAV (price prior to the dividend payment).

Amount indicates the value of the purchase or redemption.

NAV and price appear next; price being the value after the load is applied to the NAV; it could be an entry or an exit load. Entry load is being levied at the time of subscribing the units and exit load being charged at the time of redemption.

Units are allotted when fresh subscriptions are made and get reduced with withdrawals. Total units indicate the net units after the transactions are made.

Summary of the holdings give the total market value as on a particular date based on the applicable NAV for that date. Most SOAs give the cost of acquisition of the assets and this gives you an idea of the gain or loss on the investment. At any given point in time, the total unit in the account determines the value of holdings on any day. Almost all statements provide transaction slips to transact further.

(The author is CEO, Sundaram BNP Paribas Fund Services.)

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