mutual fund भाग जाए या बंद हो जाए तो पैसा डूब जाएगा ? | Is Your Money Safe in Mutual Fund - YouTube

Hello everyone, How are you all?

And what is your latest news and state?

A very lovely message came on Instagram, that sir, you made a wonderful video,

A few days back, that what would happen if a stock broker runs away?

What won’t happen? It was an eye-opener. And actually, a lot of people saw that video.

Meaning, if I say frankly, I didn’t hope that these many people would see it.

Because roughly more than 3 lakh people have seen that video. So, sir,

I invest in mutual funds, so please tell that, the people through whom we invest in mutual fund,

If they close, or if there’s some issue, then there what circumstances would happen?

Just like you talked about brokers and solved our problem. I liked the topic very much.

And thus, we’ll be covering this topic only in today’s video. And I hope that,

You all would like to know about this topic in depth.

So, I, Mukul Agrawal, welcome you to your own YouTube channel.

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Intro Music

Today, if we buy anything, then to determine its quality, we check its brand.

The more a name a brand has in the market, the more easily we trust it.

Something similar happens in Investment. When we invest our hard-earned money,

In some scheme or company, then the first question that comes is – Is our investment,

Safe with this company? Is everything right? And getting such a question is necessary.

Because nowadays, we hear about some or the other fraud. Now just think that,

You invested in some mutual fund or scheme, thinking that in the next 3 years,

It’d give you 25% return. But at the time of withdrawal, you realize that,

The company that you invested in has closed! What to do in such a scenario?

What would happen to that money of yours? If you know, do tell us in the comment box.

And if you don’t, then yes! This is what’s today’s story. We’ll understand in full detail,

That, if your mutual fund company, where you invested, took some plan,

If it closes for whatsoever reason, then what steps you should take.

Let’s first of all know why companies get closed, what is the reason behind it.

Just like any normal business can get closed due to multiple reasons, similarly,

There can be multiple reasons behind a mutual fund company getting closed.

But mutual fund isn’t a shop that we open and close according to our wish.

There’s financial risk in it. Since the money of lakhs-crores of people in the country,

Is invested in it, SEBI has designed various rules and regulations for the closing,

Of mutual funds scheme. So that, upon their closing, their investors,

Don’t face any financial problem. Now, here comes, reason to shut down a mutual fund.

And what about the capital? So, look, there are 2 main reasons behind the closing,

Of a mutual fund company. Company is either completely exiting from the business,

Or it is selling itself to some other company. It is merging one of its schemes,

For some reason, with some other scheme. This too happens a lot of times.

So, look, I told you this that there are 2 reasons for closing of any mutual fund.

Now let’s discuss these 2 reasons in detail, and let’s also know that, upon which changes,

What’ll happen with your capital. First – the company is exiting its business forever.

Or it is selling itself to some other company. So, look, for any mutual fund company,

To shut forever, there are 3 scenarios. Company is selling its biz to some other fund house,

And after doing this, mutual fund shut downs all its operations, each of it. And mostly,

It continues only with its running schemes, which doesn’t affect you much. And if,

The new fund house closes the old one, then in its running schemes, to the investor,

By cutting the applicable expenses of the fund, it returns remaining capital + profit.

Capital + profit is calculated on the basis of the old fund’s last day NAV (net asset value).

And if, the acquiring fund house decides to merge some scheme of the old house, With one of its own schemes

then the investors involved in the old scheme,

Are given an option of quitting this scheme without an exit load. Now, let’s take an example.

When L&T mutual fund bought Fidelity’s Bharti fund house, then it merged,Fidelity India flexi gilt fund with L&T gilt fund.

Right? With you, whoever is in mutual fund,

They’d understand. Now look, in our country, there are many such mutual fund working,

Which is a joint venture of two companies, which are called JV in short. If,

One among the joint venture partners, decides to exit from the business,

Then the second partner buys the entire second part. Now let’s give an example of this too.

In Nippon reliance mutual fund, it is buying Reliance capital’s stake in Reliance mutual fund,

And is changing the company’s name to Nippon India mutual fund. Now assume,

That you’ve invested in Reliance mutual fund, then you don’t need to worry. Because,

In such cases, the fund’s name does change, but their work happens just like the old scheme.

Meaning that the scheme that you got, will continue. For an example, around 2 years back,

There was an acquisition of Blackrock’s stake in DSP Blackrock mutual fund, by DSP investing managers

After acquisition, the fund was renamed to DSP mutual fund.

But from then to now, the fund’s operation and management is functional without any change.

Right?

Now, business sold to a new entrant. How? Look, in such a case, your mutual fund company,

Sells its business to such a business that is entering mutual fund for the first time. Example.

Yes bank sold its mutual fund Yes asset management to GPL Finance and investment.

Even such a deal doesn’t affect your investment, just fund’s name & company’s operation changes.

Reason behind this is that the acquiring fund house and the old fund’s operation,

The management will keep it running. Now, if it is merging one of its schemes for some reason,

then in 2018 SEBI made a rule that any mutual fund company cannot offer more than 1 scheme.

After which, more than 20 mutual fund schemes merged, which included names like,

HDFC mutual fund, Reliance mutual fund, Canara Robeco, ICICI prudential, Aditya Birla SLMF, etc.

So, whenever a company is closing, it adds all its assets to the assets of the surviving fund.

Now I’ll give you an example of this too, see I’m giving you a live example of everything.

Aditya Birla Sun Life tax saving plan has a merger with Aditya Birla Sun Life tax relief 96.

Upon merging, all assets of Aditya Birla Sun Life tax saving plan were added, to Aditya Birla Sun Life tax relief 96,

which was a living plan. All those investors,who had invested in Aditya Birla Sun Life tax saving plan,

they were given, In exchange a unit of the same amount of funds

In this case, after the announcement of merger date,

by the fund house, investment of closing fund, has a permission, to exit from mutual fund,

or to switch without any exit load in some other scheme, of that fund itself. An investor,

till a limited time of 30 days after the announcement of merger, can use this exit option.

Also, the investors of this closing scheme, can stay invested in the scheme that’s being merged.

So, upon selecting the option of staying invested before the merger date, these investors,

After the merger, will be given the units of the merged scheme in exchange of the old scheme units.

Now, the closing of a fund house, or the merging of some mutual fund scheme, in which,

You invest your hard-earned money, can be worrisome. If that happens, then you should,

For some time, think on investing in the new fund. So that, we can understand,

How the fund is performing under the new management post the merger.

Look, this isn’t necessary that change is bad. What if, the new fund manager,

Or the merged fund, in comparison with your original scheme in which you invested,

Is better and performs wonderfully. Assume that the new fund, doesn’t perform well,

As per your expectations, then you do have an exit option. You can leave whenever you wish.

So, you don’t need to think or worry that, if your mutual fund gets shut.

Hoping that you would’ve liked the video and your concepts got cleared.

If there’s some doubt or question in the concept, then do write in the comment box.

And keep telling us about such lovely and unique concepts,

Then we’d keep making videos on them. And share this video so much,

That people who worry, who don’t know, till them it reaches,

And they get guided properly. Thank you so much.