Suppose I start a Systematic Investment Plan (SIP) on 01-01-15, stop the SIP on 01-02-16. I don't redeem my investment. It gets deactivated and I redeem it after two months on 01-08-16. Will I get the Net Asset Value (NAV) of 01-02-16 or 01-08-16?
- M Amarnath Reddy
The NAV as on the date of redemption and not the one on the last date of investing will be applicable for all redemptions. If you request for redemption before the cut-off time applicable to the scheme, you will get the Net Asset Value (NAV) of 01-08-2016. Mutual funds have a cut-off time for purchase and redemption. If your request is made before the cut-off time, you will get the same day's NAV. If your request was made after the cut-off time, you will get the next day's NAV.
By the way, your investment doesn't get "deactivated" once you stop investing. The fund manager would be buying and selling securities in the scheme regularly depending on his market outlook. In other words, if you keep the money in a scheme, it will continue to make (sometimes the opposite is also true) money for you.
For more information, read: A Matter of Time.