These days between work, family, and friends, most of us do not have the time to make or monitor personal investment decisions on a regular basis. Mutual funds have qualified professionals who do all this for you. This is the reason why, the world over, they have become the most popular means of investing.
Mutual funds minimise risk by creating a diversified portfolio while providing the necessary liquidity. Additionally, you benefit from the convenience of not having to bother with too much paperwork or repeat transactions. It is our belief that investors differ in their investment needs based on their personal financial goals.
It is recommended that you should, at the very beginning, identify your own financial goals, be it planning for a comfortable retired life or children's education. After defining the financial goals, you need to plan for them in an organised manner and look at investments that help achieve these goals.
Mutual funds vary in their investment objectives, thus providing you with the flexibility to create an investment plan based on individual financial goals. Investment experts recommend growth investments such as equity funds and stocks as a good choice for funding needs that are five years or more away, income funds to meet medium-term needs and liquid funds for short-term requirements.
Is there a guaranteed return on the mutual funds?
No, there is any guarantees on the returns on any of our funds.
Are mutual funds insured?
No. Mutual fund units are not insured by the government, or any government agency, and do not have any other type of insurance, unlike certain types of checking or savings accounts and certificates of deposit. There is no guarantee that when you sell your shares, you will receive what you paid for them. However, because mutual fund investments are more risky than insured investments, they generally offer potential for higher long-term returns.
What should I look for in an investment? Are the investments I have now the right ones for me?
Investors differ in their investment needs based on their personal financial goals. It is recommended that you should, at the very beginning, identify your own financial goals, be it planning for a comfortable retired life or children's education. After defining the financial goals, you need to plan for them in an organised manner and look at investments that help achieve these goals.
To build a successful investment strategy, you should carefully structure your investment plan so that you can achieve your goals without taking more risk than you can afford or are comfortable with. You also need to consider how much time you have to reach your different goals and your personal circumstances.
Investment experts recommend that growth investments, such as equity funds and stocks, are a good choice for funding needs that are 5 years or more away, income funds to meet medium-term needs, and liquid funds for short-term requirements. See Getting started for additional information.
How do I enrol in the Systematic Investment Plan?
You can participate in the Systematic Investment Plan (SIP) of Franklin Templeton Funds by investing a minimum of Rs.500/- or more either on a monthly or quarterly basis by providing us with post-dated cheques (dated the 1st or the 7th of each month) for at least one year. The cheques may be made payable anywhere in India. You may also give cheques in 2 lots of 6 cheques each. We would present the cheques at the dates mentioned and add units to you account (subject to the realisation of cheques) at the prices prevailing either on the 1st or the 7th as may be applicable. You would receive a statement of account for each such transaction.
Existing investors of Franklin Templeton Funds keen to start with SIP should just fill in the appropriate box on their Account Statement and mail it along with the post-dated cheques to their Investor Service Centre. You will receive a letter confirming that your name has been included in the SIP.
How do I enrol in the Systematic Withdrawal Plan?
Mutual Funds you a facility to plan for your retirement and other regular monthly income needs through the Systematic Withdrawal Plan (SWP). Depending on your needs for monthly or quarterly income, you can then choose to withdraw wither a fixed sum per month or quarter, or the capital appreciation in the Net Asset Value of your investment.
When is the right time to invest in equities?
No matter how hard we try, it is rarely possible to predict the short-term movements in the equity market and therefore it is difficult to determine the right time to invest. However, "Rupee-Cost Averaging" could help you even out your investment costs and hence use the short-term market fluctuations to your advantage.
What is the procedure for redeeming fund units?
Mutual funds are open-ended, which means that you can get your money back anytime you wish. All you need to do is fill in the detachable redemption request on the account statement and deposit it with any of our Investor Service Centers.
The redemption price per unit is the net asset value per unit on the relevant day, without any discount. We provide you with quick service. Your redemption cheques will normally be mailed within 48 hours of receiving your request at any of our Investor Service Centres.
What are tax implications to resident unitholders?
A) Tax Implications To Unitholders
The following summary outlines the key tax implications applicable to unit holders based on the relevant provisions under the Income-tax Act, 1961 ('Act'), the Wealth-tax Act, 1957 and the Finance Act, 2006 (collectively called 'the relevant provisions').
The following information is provided for general information only. However, in view of the individual nature of the implications, each investor is advised to consult with his or her own tax Advisors/Authorised dealers with respect to the specific tax and other implications arising out of his or her participation in the schemes.
B) Tax Implications On Mutual Fund
Income Earned Or Received By The Mutual Fund. Franklin Templeton Mutual Fund is registered with SEBI and as such, the entire income of the Fund is exempt from income tax under Section 10(23D) of the Act. In view of the provisions of Section 196(iv) of the Act, no income tax is deductible at source on the income earned by the mutual fund.
Income Distributed By The Mutual Fund. As per provisions of the Act (Section 115R), Franklin Templeton Mutual Fund will be required to pay dividend distribution tax ('DDT') as follows:
No DDT to be paid on equity oriented funds
DDT to be paid on other funds at the following rates:1. at 14.025 percent (including a surcharge of 10 percent and an additional surcharge by way of education cess of 2 percent on the amount of tax plus surcharge) on dividend distributed to individuals and HUFs; and 2. at 22.44 percent (including a surcharge of 10 percent and an additional surcharge by way of education cess of 2 percent on the amount of tax plus surcharge) on dividend distributed to persons other than individuals and HUFs, for instance, corporates.
What do I get as proof of my holdings?
You get an "account statement" which is similar to a bank passbook. The account statement is a non-transferable document which shows details of all purchases and sales, along with the price at which the purchase or sale was made. It will also show the, amount invested and redeemed to date and the number of units held, helping you track your investments.
A fresh account statement will be sent to you reflecting the updated holdings of the unitholder after every transaction. Under normal circumstances, the account statement will be sent to you within 3 working days after the date of receipt of the purchase or redemption request at any of the Investor Service Centres. If an applicant so desires, the Asset Management Company can issue a non-transferable unit certificate to the applicant within 6 weeks of the receipt of request for the Certificate.
Can I follow my investments in the daily paper?
Yes. Most mutual funds and publicly traded stocks are listed in the business section of your local newspaper or in financial publications such as the Economic Times. Mutual funds are listed in a separate section and are categorised by the stock exchange on which they trade (e.g. the BSE Sensex).
Will I have a switching facility between funds?
Unitholders will have an option to switch all or part of their investment in one fund to another which is available for investment at that time. The Asset Management Company would currently not charge any fees for such switching.
To process a switch, a unitholder must provide clear instructions. Such instructions may be provided by completing a form and lodging it on any business day with any of the Investor Service Centres or the office of the Registrar and Transfer Agent. The form may also be sent by post.
An account statement reflecting the new holdings will be sent to the unitholder within 3 days of completion of the transaction.
Tax implications for the mutual fund
Tax benefit to the Fund. Templeton Mutual Fund is registered with SEBI and as such, the entire income of the Fund is exempt from income-tax under Section 10(23D) of the Act and is entitled to receive income without any deduction of tax at source.
