Back to Blogs

The Drawbacks of Having Multiple Folios with One Fund House

October 05, 2017

The Drawbacks of Having Multiple Folios with One Fund House

Most financial advisers will agree that a good way to invest lump sum amounts in equity funds is through systematic transfer plans (STPs) in which you invest a lump sum in a liquid fund and transfer some portion of it to equity funds from time to time.

Multiple-Folios-with-One-Fund-House

Image Source

It goes without saying that the funds have to be from the same fund house. However, they need to be in the same folio as well. For instance, you have made investments in SBI Liquid Fund (SLF) in folio number 100, and SBI Equity Fund (SEF) in folio number 200. Now, if you want to transfer money from SLF to SEF, then it’s natural to assume that the funds are simply moved in one transaction. However, that’s not really what happens. The fund house makes a new investment in SEF for you instead. So, you end up with three individual investments:

  • Original investment in SLF in folio 100
  • A new investment in SEF in folio 100
  • Original investment in SEF in folio 200

If you have a large number of folios use STPs often, then you can end up so many investments that management and paperwork can become a nightmare. However, you can solve this problem through consolidation.

Consolidation of Folios

The easiest way to improve mutual funds management is to consolidate your folios (a repository that contains all your investments) with a fund house.

To get started, you can try to stick with just one financial advisor as it will minimize the number of account statements that you will receive. You can also merge folios only with the identical holdings.

The mode of holding should also be the same. So, if a folio has an “either or survivor” mode, then you cannot merge it with a folio that has a “joint” mode.

Important Links:
Tags:
Finance

Want a Successful Career?

Fill up this form for a free career psychometric test & a 30 min career guidance session with our advisor.

Recent Posts
Бесплатные игры Онлайн: Играйте Бесплатно На Яндекс Игры
November 23, 2024
Лучшие казино игры для Android Скачать APK бесплатно
November 22, 2024
abebet Slot Oyunlarýnda Özel Bonuslar
November 22, 2024

Recommended for you ...

Бесплатные игры Онлайн: Играйте Бесплатно На Яндекс Игры

November 23, 2024

Лучшие казино игры для Android Скачать APK бесплатно

November 22, 2024

abebet Slot Oyunlarýnda Özel Bonuslar

November 22, 2024

Chat on WhatsApp