News: 5 ways the closure of mutual fund schemes impacts investors -04-05-2020
Updated On: May 04, 2020
5 ways the closure of mutual fund schemes impacts investors
1. Existing investors cannot redeem their money from the fund.
2. Purchases or redemptions through Systematic Investment Plans, Systematic Transfer Plans and Systematic Withdrawal Plans are also not allowed.
3. Investors will receive whatever amount the fund house is able to recover by liquidating the underlying investments in proportion of their holdings in the respective schemes.
4. There is no fixed date by which the investors will receive money, they will get it as and when the fund house is able to recover the money.
5. Shutting a scheme would prevent redemption pressure, which otherwise would have forced the fund to sell holdings at significantly lower value. This would have negatively impacted investors who decided to stay on.
