In recent times mutual funds have gained traction as potential investment options among Indians. Investors who choose to invest in MFs do so to fulfil various future financial goals. As a result, investors also need to keep track of their MF investments over the long haul to ensure that they remain on top of their finances. This can be done through folio or portfolio numbers allotted on every mutual fund investment.
Folio numbers are unique identities, allotted to every mutual fund investor that helps in linking their accounts with the fund. They function like bank account numbers and are also used to identify the fund investors.
These numbers also help to track various aspects of the MF investment, like – how much money has been invested by the individual, contact details, history of transactions, etc.
Individuals can access the portfolio numbers allotted to them from their mutual fund statement, fund house, or broker. When an individual makes an application for a mutual fund, the column under folio number is left blank and is later filled by the respective AMC or fund manager, when the first investment is carried out.
While understanding “what is folio number in a mutual fund” is easy enough, it is also crucial to learn why it is relevant to investors.
Establishing a system that records all transactions carried out between an investor and a mutual fund is crucial to ensure that each investor is returned the amount they are entitled to. This can be done efficiently by allotting these portfolio numbers, which also help to determine which fee structure applies to each investor.
Usually, each investor has one single folio number for every investment made through a particular mutual fund. In case an individual is allotted multiple numbers, he/she can request the respective fund manager to consolidate all of them into one. The need for maintaining a folio number has been further boosted owing to the emergence of electronic record-keeping facilities in recent years.
Apart from knowing “what is folio no”, it is important to learn more about its importance in making mutual fund investment. For instance,
Having a valid folio number is, thus, extremely crucial when it comes to managing one’s mutual fund investment effectively.
The easiest way to look up the portfolio number is through a mutual fund statement. Nonetheless, these statements can get lost, leading investors to undergo significant trouble to retrieve their numbers. Thankfully, these folio numbers can be accessed via various sources. These are –
|Mutual fund statements||AMC’s app or website||Consolidated account statements|
|These are handed to investors when they purchase funds through an AMC.||Transactions can be made online or through the respective AMC’s app.||These statements are issued, like banks issue passbooks for an individual’s salary or savings account.|
|Folio numbers are provided to investors in the form of a physical statement, e-mail or SMS.||The number is available on the e-statements generated each month.||With these statements, investors can access information about the entire scheme, alongside the folio numbers.|
|Investors are levied with a charge if they request copies of mutual fund statements from their AMCs.||Statements generated through the app or website are commission-free. This means that investors do not have to incur additional charges if they want to look up their portfolio number through these platforms.||Consolidated account statements are generated for free by AMCs and fund managers. Investors will, however, have to bear additional charges for other statement requests.|
Thus, even if an investor loses his/her physical copy of a mutual fund statement, they can access their folio numbers through other means, thanks to electronic record-keeping facilities.
As mentioned before, investors can be allotted multiple folio numbers, which can even be beneficial from the operational point of view for mutual funds.
For instance, investors choosing to invest through multiple folio numbers under the same fund house are proffered distinct advantages. If they make profits from one folio, and losses under another, investors enjoy the flexibility of deciding which mutual fund investment to sell first, as per tax efficiency.
On the other hand, if all investments are made under one folio number, investors will have to adhere to the First In, First Out (FIFO) principle, from the point of taxation. Nonetheless, it is still recommended for individuals to consolidate multiple portfolio numbers into one to ensure that they can keep track of all their investments efficiently.
Folio numbers, thus, are one of the key components of making successful mutual fund investments. Investors must keep their numbers handy at all times to propagate better financial decision-making by knowing about the performance of their mutual fund investments.