Thread by @myfinology

𝗪𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝘀 𝘄𝗵𝗲𝗻 𝗮 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘀𝗵𝘂𝘁𝘀 𝗱𝗼𝘄𝗻 𝗶𝘁𝘀 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀?🤔

A detailed thread that you should not miss ⤵️

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#stockmarkets #MutualFunds

Mutual funds have been the safest investment for investors for many yrs, people invest der hard-earned money over MF to secure their future.

However, AMCs & schemes can shut down for mny reasons like any other business.

What will happen to ur hard-earned money then?

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𝗪𝗵𝗲𝗻 𝗱𝗼 𝗺𝘂𝘁𝘂𝗮𝗹 𝗳𝘂𝗻𝗱𝘀 𝘀𝗵𝘂𝘁 𝗱𝗼𝘄𝗻?

📌SEBI can directly ask AMC to shut.
📌 One of the trustees of MF has approached SEBI for approval to close.
📌Another fund house has acquired an MF.
📌Discontinuation of a scheme due to Merger of Scheme of same AMC
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📌 𝗜𝗻 𝗰𝗮𝘀𝗲 𝗼𝗳 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼𝘀 1 & 2

When the fund house closes its operation voluntarily or by following the regulatory guidance, all investors are returned their funds based on the last available net asset value, before winding up.

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📌𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱 𝘀𝗼𝗹𝗱 𝘁𝗼 𝗮𝗻𝗼𝘁𝗵𝗲𝗿 𝗙𝘂𝗻𝗱 𝗛𝗼𝘂𝘀𝗲
When the mutual fund house has decided to exit frm business & decided to sell it out to another Fund, d acquiring fund house may decide.

-Close d schemes
-Continue with old scheme
-Merge schemes.

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𝗪𝗵𝗲𝗻 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗔𝗠𝗖 𝗱𝗲𝗰𝗶𝗱𝗲𝘀 𝘁𝗼 👇

📌𝗖𝗹𝗼𝘀𝗲 𝘁𝗵𝗲 𝘀𝗰𝗵𝗲𝗺𝗲:

The fund house has to pay the investors based on the NAV of the fund calculated based on the market closing on the last day of operation.

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📌𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗲 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗼𝗹𝗱 𝘀𝗰𝗵𝗲𝗺𝗲:

There will be minimal impact on the investors. The scheme will continue to operate as before after a change in name and scheme Management (if any).

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If the acquiring AMC decides to merge schemes of the Fund House that was acquired with similar funds of its own, investors are given option⤵️

📌To exit from the scheme without incurring any exit load. After the merger, the old scheme will no longer operate.

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📌Investors who stay invested in the Mutual Fund being shut down after the merger will receive units of the merged fund operated by the acquiring Fund House.

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𝗢𝘂𝗿 𝗦𝘂𝗴𝗴𝗲𝘀𝘁𝗶𝗼𝗻😎:

Changes are not always unfavourable for investors.

🔍You should check the track record of the schemes managed by the new AMCs and the fund manager who is going to manage the fund.

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🔍Also, you can stay invested for a while to find out how the fund is performing under new management. And in case, it doesn’t perform as per your expectations, you can always exit the fund.

Visit Recipe.finology.in to know our Mutual Fund recommendations

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