Fund values have nosedived along with the stock market crash as economies worldwide have come to a near standstill due to the lockdowns imposed to contain the spread of Coronavirus.
The Novel Coronavirus COVID-19 has served double blow to mutual fund (MF) investors, who are not Net-savvy. First, fund values have nosedived along with the stock market crash as economies worldwide have come to a near standstill due to the lockdowns imposed to contain the spread of Coronavirus. Secondly, the highly-infectious disease has also capped the chance of grabbing the opportunities to invest in a falling market to acquire higher numbers of MF units at a cheaper NAV through physical applications.
This is because, to protect the employees from the COVID-19 infection, the Association of Mutual Funds in India (AMFI) has announced that the offices of the Asset Management Companies (AMCs) and their Register and Transfer Agents (RTAs) will remain closed for some time. So, there will be no opportunity to submit physical forms for MF transactions, including – fresh/additional purchase, switch in, switch out, redemption etc.
Although the offices will be shut, the employees would work from home and MF transactions through online modes would continue.
“Under the circumstances, as a social-distancing measure to ensure safety of investors, distributors, visitors and the employees of the mutual funds & their RTAs, all Mutual Funds shall keep their collection centres / branch offices (“official points of acceptance”) closed with effect from Monday 23rd March 2020 and allow only online transactions through various electronic modes, such as mutual fund websites /web-portals / various digital platforms /apps or virtual channels etc. till the situation comes under control and until social distancing advisory is withdrawn by the authorities,” said AMFI in an advertisement issued in public interest.
So, to avail the opportunity to get higher number of units at low NAV by investing in down market, investors have no options, but to become tech savvy and go online.
However, to ensure that the existing investors, transacting through physical mode, don’t suffer due to closure of offices, AMFI, in a letter to market regulator Securities and Exchange Board of India (SEBI), said, “As an alternative to help such investors, AMCs/RTAs will accept transaction requests sent from the registered email IDs of the unitholders / registered domain IDs of institutional investors.”
“Redemption payment will be made to the registered bank account of the clients,” said AMFI in the letter.