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Does Face Value Matter?

The change in face value of liquid funds & ultra short-term debt funds doesn’t affect the investors…

If we look at data over the past year, 51 plans, sub-plans or options of liquid funds and ultra short-term schemes of mutual funds have changed their face value. In all cases, the Rs 10 has been upped to Rs 100 or Rs 1,000. And that is just the start. Going forward, a lot more similar moves will be witnessed across funds in these categories.<./p>

Is this a big deal?
In reality, it does not affect the investor at all. Reason being that the fundamental attributes of the fund do not chang.

why are funds going ahead anyway?
Because the gains in the scheme are almost negligent when one has a lower face value, giving investors the (wrong) impression about their investments. The change has just one aim: to make the change in NAV reflect more precisely. n