In view of changing market scenario, it is important to review one’s investment portfolio. After the review, the existing asset allocation may need to be modified by making changes to match the revised allocation. With respect to mutual funds one can carry out these changes in ways listed below.
Switch request
A switch request can be made to transfer units from an existing scheme to another scheme of the same fund house. A simple switch form indicating the folio number, amount/units to be switched, ‘from’ scheme and ‘to’ scheme needs to be signed and submitted by the unitholder.
Redemption – Partial/Full
For partial or full redemption, a request needs to be submitted to the fund house. In case of partial redemption, the amount to be redeemed needs to be indicated in the request along with folio number. One needs to use the updated bank details, else updated bank mandate with copy of cancelled bank cheque must be provided along with the request.
Systematic Withdrawal
If the review suggests regular withdrawal to ensure monthly drawdown from the investment portfolio, a systematic withdrawal plan (SWP) can be registered with the fund house. The
SWP form needs to indicate the amount to be withdrawn, frequency of withdrawal (monthly/quarterly), period of SWP and updated bank details. Once the request is registered, the indicated amount will be redeemed from the fund house at the desired frequency and credited to the investor’s bank account.
Systematic transfer
In a systematic transfer plan (STP), a fixed amount is periodically transferred to a desired scheme. An STP form must be submitted to indicate the ‘from’ scheme and ‘to’ scheme along with frequency and period of STP.
Points to note
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)