Mutual Fund Name Changed? What Do The Investors Need to Do?

The circular issued by SEBI in 2017 called for categorization and rationalization of mutual fund schemes to standardize the different categories of funds and their attributes. The fund houses were instructed to keep a clear distinction between different categories in terms of asset allocation, investment strategy, etc., to ensure better clarity for investors.

• The total number of mutual fund schemes has reduced due to standardization and merging of funds. Since there is now only a single scheme in each category, it is easier for investors to pick and choose schemes.
• With a single fund in each category, investors can easily compare different schemes while investing.
• The naming terms for different schemes are now uniform across fund houses. Hence, the names are no more confusing and provide better clarity to the investors.

There may be two types of changes that you will observe in your fund – Just the name of the fund has changed or the category of the fund has changed(due to merging or change in attributes). Let’s understand what you need to do in each case:

• If only the mutual fund name changed , you do not need to do anything. If everything apart from the name is the same, your returns will also be on the same lines.
• In case your fund has been merged with another fund or the attribute like its investment approach, asset allocation has changed, you must analyse the changes first. Try to understand the effects of these changes on your risk appetite and chances of returns. Accordingly, you may decide whether to stay invested in the same fund or pick another one.

The investors must find out what exactly has changed in their fund and analyse its effects. The changes may not always affect your investment and hence understand the changes in detail before taking any action.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.