Topic: How is mutual fund trading done? Can trading of mutual funds be done online like stocks?

Please explain

Form Filling Exercise – Investor is required to fill the common application form. Mentioned below are the important points for filling the common application form.

Payment Details

o Verify the Scheme Name before writing the cheque
o Validate that the Scheme Name written on the cheque is similar to the one mentioned in Common Application Form

Bank Details

o Always mention the 10 digit MICR code (the no. next to the cheque no.) in bank details
o Mention the NEFT code in bank details if the cheque of HSBC Bank, Citibank, Axis Bank or ABN Amro Bank is issued

Other Details

o Always fill the Acknowledgement Slip
o Always tick the option for Email Account Statement

Mode of Holding

o Single
o Joint
o Anyone or survivor (Default)
* If there are 2 investors for one application, always tick Anyone or survivor option
* Anyone or survivor option enable both the investors to do any transaction with their respective signatures

Important Documents needed for investment in mutual funds

* PAN Card
* KYC Acknowledgement

Online Trading of mutual funds like stocks – Exchange Traded Funds (ETFs)

o Exchange Traded Funds track the market index or the respective benchmark
o Trades like a single stock on the stock exchange
o Units can be bought and sold on the stock exchange
o These units need to be held in Dematerialized form
o The price of ETFs is determined by the market forces and keep changing from time to time
o ETFs are cost effective and more efficient in terms of tracking the index performance

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