I invested Rs 40,000 in Fidelity Tax Advantage Fund about 18 months back. I wanted to exit the scheme due to poor performance by the fund; however, the customer service center of the fund house says that I cannot redeem these units before the completion of the three year lock in period. Since I have not availed any tax benefits can I redeem my funds by paying an exit load?
-M.C.S Raju
We hate to be the bearer of bad news, but you will not be able to redeem your funds until the three year lock in period has lapsed. To avoid such an issue we always advise investors to read the offer document and Key Information Memo-randum (KIM) before investing. Regulations stipulate all distributors/wealth planners/relationship managers to present these documents to the investor before they apply to any mutual fund scheme.
Given the number of close-ended schemes launched, you must also check the tenure of such funds as well as the applicable load on premature redemption. The liquidity window of these funds should also be clear to you before investing.
This article was originally published on June 14, 2007.
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