Question 1

What is a Mutual Fund?

Accepted Answer

A mutual fund is a pool of money collected from many investors to invest in securities like stocks, bonds, and other assets. It is managed by professional fund managers and regulated by SEBI. Mutual fund investments are subject to market risks — please read all scheme-related documents carefully before investing.

Question 2

What is NAV (Net Asset Value)?

Accepted Answer

NAV is the per-unit market value of a mutual fund scheme, calculated by dividing the total value of all securities in the portfolio (minus liabilities) by the total number of units outstanding. SEBI mandates that AMCs publish NAV daily for open-ended schemes. NAV changes with market movements and does not, by itself, indicate whether a fund is 'cheap' or 'expensive'.

Question 3

What is a SIP (Systematic Investment Plan)?

Accepted Answer

SIP is a method of investing a fixed amount regularly (monthly, quarterly, or weekly) in mutual funds. It facilitates rupee cost averaging — buying more units when markets are low and fewer when markets are high — and encourages disciplined, long-term wealth building. SIP does not assure a profit or protect against loss in declining markets.

Question 4

What is an STP (Systematic Transfer Plan)?

Accepted Answer

An STP allows you to systematically transfer a fixed or variable amount from one mutual fund scheme to another within the same fund house. It is commonly used to move money from a debt or liquid fund into an equity fund over time, helping manage market-entry risk. Tax implications (capital gains) apply on each transfer, so investors should consult their tax adviser.

Question 5

What is an SWP (Systematic Withdrawal Plan)?

Accepted Answer

An SWP lets you withdraw a fixed amount from your mutual fund investment at regular intervals while the remaining corpus stays invested. It is often used by retirees or those seeking periodic cash flows. Each withdrawal may attract capital gains tax depending on the holding period and fund type. SWP does not guarantee that the corpus will last indefinitely — actual outcomes depend on market performance.

Question 6

What is the difference between direct and regular mutual funds?

Accepted Answer

Direct plans are purchased directly from the AMC without a distributor, so they have a lower expense ratio. Regular plans are facilitated through AMFI-registered distributors like Acornia, and the expense ratio includes distribution commission. The difference in expense ratio between direct and regular plans is disclosed by the AMC in the scheme documents. Investors choosing regular plans benefit from ongoing guidance, portfolio reviews, and service support from their distributor.

Question 7

How are mutual fund returns taxed?

Accepted Answer

Taxation depends on the fund type and holding period. For equity funds, short-term capital gains (held less than 12 months) are taxed at 20%, while long-term gains exceeding Rs 1.25 lakh per financial year are taxed at 12.5%. For debt funds, all gains are taxed at the investor's income tax slab rate regardless of holding period (as per Finance Act 2023 amendments). Tax laws are subject to change — please consult a qualified tax adviser for your specific situation.

Question 8

What is the minimum investment to start?

Accepted Answer

You can start investing in mutual funds with as little as Rs 100–500 per month through a SIP. Lump sum minimums vary by scheme but are typically Rs 500–5,000. PMS requires a minimum of Rs 50 lakh and AIFs typically require Rs 1 crore, as mandated by SEBI regulations.

Question 9

What are the risks of mutual fund investments?

Accepted Answer

Mutual fund investments are subject to market risks including equity risk, interest rate risk, credit risk, and liquidity risk. The degree of risk varies by scheme category — equity funds carry higher volatility than debt funds, but no mutual fund category is entirely risk-free. Past performance is not indicative of future returns. Please read all scheme-related documents carefully before investing.

Question 10

What is the Base Expense Ratio (BER) introduced by SEBI?

Accepted Answer

The Base Expense Ratio (BER) is a new cost metric under SEBI's Mutual Fund Regulations 2026, effective April 1, 2026. BER represents only the core fee charged by the AMC — investment management and recurring scheme expenses. Unlike the old TER, BER excludes GST, stamp duty, STT, and brokerage, which are now disclosed separately. This gives investors clearer visibility into what they actually pay the fund house versus statutory charges. The new formula is: TER = BER + Brokerage/Transaction Costs + Statutory & Regulatory Levies.

Question 11

How does the new BER regulation affect my mutual fund costs from April 2026?

Accepted Answer

Under the new BER framework, headline expense caps are 10–15 basis points lower across all AUM slabs compared to the old TER caps. For example, the maximum BER for an equity scheme with AUM up to Rs 500 crore is 2.10% (down from 2.25% TER). Brokerage caps have also been halved — from 12 bps to 6 bps for cash market transactions. However, since statutory levies (GST, stamp duty) that were previously bundled inside TER are now charged separately on actuals, the actual total cost reduction for investors is real but modest. Overall, the change is investor-friendly — you pay less in fund management fees and get better transparency.

Question 12

What is the difference between BER and TER under the new SEBI regulations?

Accepted Answer

Under the old regime (SEBI MF Regulations 1996), TER was a single bundled number that included AMC fees, GST, brokerage, and statutory levies — all under one cap. Under the new regime (effective April 1, 2026), BER covers only the AMC's core management fee, while brokerage and statutory charges are disclosed and charged separately on actuals. The new TER = BER + Brokerage + Statutory Levies. This separation means the headline BER number is lower than the old TER cap, but investors now see exactly what each component costs.

Question 13

What is PMS and who should consider it?

Accepted Answer

Portfolio Management Services (PMS) is a SEBI-regulated professional investment service with a minimum ticket size of Rs 50 lakh. Unlike mutual funds where money is pooled, PMS investors hold securities directly in their own demat account. PMS may suit HNIs seeking customised portfolio management, but it carries concentration risk and higher fee structures (management + performance fees). Acornia facilitates access to select PMS providers — we do not manage PMS portfolios directly.

Question 14

What is an AIF (Alternative Investment Fund)?

Accepted Answer

AIFs are privately pooled investment vehicles regulated by SEBI under the AIF Regulations. They are categorised into Category I (venture capital, social venture, infrastructure), Category II (private equity, debt funds), and Category III (hedge funds, complex strategies). The minimum investment is typically Rs 1 crore (lower for angel funds). AIFs often have lock-in periods, capital call structures, and limited liquidity. Acornia facilitates access to select AIF products for eligible investors.

Question 15

What is the difference between Mutual Funds, PMS, and AIF?

Accepted Answer

Mutual Funds are pooled vehicles open to all investors (starting from Rs 100 SIP), regulated under SEBI Mutual Fund Regulations, with daily NAV and high liquidity. PMS (minimum Rs 50 lakh) offers direct ownership of securities with customised management. AIFs (minimum Rs 1 crore) are privately pooled vehicles for sophisticated investors, often with lock-ins and complex strategies. Each product has different risk-return characteristics, fee structures, and regulatory frameworks. Suitability depends on your investment horizon, risk tolerance, and financial goals.

Question 16

What is SIF and how does it differ from regular mutual funds?

Accepted Answer

Specialized Investment Funds (SIF) are a new SEBI-introduced category that sits between traditional mutual funds and PMS. SIFs allow higher concentration in individual stocks and sectors compared to regular mutual funds, and may employ long-short or derivative strategies. They require higher minimum investments and a suitability assessment. SIFs are distributed under AMFI (ARN/EUIN) like mutual funds. Acornia is registered for SIF distribution. Please review scheme documents for specific risk factors.

Question 17

What is ELSS and how does it save tax?

Accepted Answer

ELSS (Equity Linked Savings Scheme) is a category of mutual fund that qualifies for tax deduction under Section 80C of the Income Tax Act, up to Rs 1.5 lakh per financial year. ELSS has a mandatory 3-year lock-in period — the shortest among Section 80C instruments. Being equity-oriented, ELSS carries market risk and does not guarantee returns. Long-term capital gains on ELSS exceeding Rs 1.25 lakh per year are taxed at 12.5%. Tax benefits are subject to changes in tax laws.

Question 18

How do I start investing with Acornia?

Accepted Answer

Getting started is simple: (1) Book a consultation through our website or call us at +91-8208575689. (2) We conduct a discovery session to understand your goals, risk profile, and financial situation. (3) Complete KYC verification (one-time process as per SEBI/AMFI requirements). (4) We help you select suitable schemes and set up your investments. (5) Track your portfolio through our client portal at acornf.investwell.app. The entire onboarding process is paperless and can be completed online.

Question 19

What documents are needed for KYC?

Accepted Answer

As per SEBI and AMFI regulations, KYC (Know Your Customer) is mandatory for all mutual fund investments. Required documents include: (1) PAN card (mandatory for investments above Rs 50,000), (2) Aadhaar card or passport for identity and address proof, (3) a recent passport-size photograph, and (4) bank account details (cancelled cheque or bank statement). KYC is a one-time exercise — once completed with any SEBI-registered intermediary, it is valid across the mutual fund industry. NRIs need additional documents including passport, overseas address proof, and FEMA declarations.

Question 20

How does Acornia's portfolio review process work?

Accepted Answer

We follow a structured Discover–Design–Deploy–Review cycle. Your dedicated relationship manager conducts periodic portfolio reviews (typically quarterly) covering: performance analysis relative to benchmarks, asset allocation drift assessment, rebalancing recommendations if needed, and alignment with your stated financial goals. Reviews are data-driven and focus on long-term strategy rather than short-term market movements. All recommendations are based on your documented risk profile and investment objectives.

Question 21

How do I track my investments?

Accepted Answer

You can track your investments through our client portal at acornf.investwell.app, which provides a consolidated view of your portfolio, returns, and transaction history. Your dedicated relationship manager also provides periodic portfolio reviews and is available for queries. You will also receive account statements directly from the AMCs and registrars (CAMS/KFintech).

Question 22

Can NRIs invest in Indian mutual funds?

Accepted Answer

Yes, NRIs can invest in most Indian mutual fund schemes on a repatriable or non-repatriable basis through NRE or NRO bank accounts respectively. However, NRIs from certain jurisdictions (notably the US and Canada) face restrictions due to FATCA compliance — many AMCs do not accept investments from US/Canada-based NRIs, though some do. Acornia facilitates NRI investments in compliance with FEMA regulations and helps navigate the documentation requirements. All NRI investments require a valid PAN, KYC completion, and appropriate FEMA declarations.

Question 23

What are the FEMA rules for NRI investments in mutual funds?

Accepted Answer

Under the Foreign Exchange Management Act (FEMA), NRIs can invest in Indian mutual funds under the general permission granted by RBI. Key rules include: investments must be routed through NRE (repatriable) or NRO (non-repatriable) bank accounts; redemption proceeds from NRE-sourced investments can be freely repatriated; NRO-sourced redemptions are subject to annual repatriation limits and TDS. Double Taxation Avoidance Agreements (DTAA) between India and the NRI's country of residence may help avoid being taxed twice. We work with qualified Chartered Accountants to help NRI clients navigate FEMA and DTAA compliance.

Question 24

Do you offer NRI investment services?

Accepted Answer

Yes, Acornia facilitates India-compliant portfolio services for NRIs including mutual fund distribution, FEMA-compliant documentation, and coordination with qualified Chartered Accountants for DTAA alignment and tax planning. We assist NRIs from multiple jurisdictions, though product availability may vary based on the investor's country of residence and AMC acceptance policies.

Question 25

Is Acornia a SEBI-registered investment adviser?

Accepted Answer

No. Acornia Investment Services Private Limited is an AMFI-registered Mutual Fund Distributor (ARN: 192746), NOT a SEBI-registered Investment Adviser (RIA). As a distributor, we facilitate mutual fund transactions and provide scheme information as permitted under AMFI guidelines. We do not charge advisory fees. Our compensation comes from commissions paid by AMCs as disclosed on our Disclosure page. For independent fee-only investment advice, investors should consult a SEBI-registered Investment Adviser.

Question 26

What fees does Acornia charge?

Accepted Answer

Acornia does not charge any direct fees to investors for mutual fund distribution. Our compensation comes from trail commissions paid by Asset Management Companies (AMCs) as part of the expense ratio of regular plan mutual funds. These commissions are fully disclosed on our Disclosure page as required by SEBI regulations. The commission rates vary by fund category — for example, equity funds typically have trail commissions of 0.50%–1.10%, while liquid funds are 0.05%–0.10%. There is no additional cost to the investor beyond what is embedded in the scheme's expense ratio.

Question 27

How can I contact Acornia?

Accepted Answer

You can reach us at support@acornf.com or call +91-8208575689. Our office is located at 5, Srinath Housing Society, Mayur Colony, Kothrud, Pune – 411038. You can also book a free consultation through our website. For account-related queries or corrections, write to myaccount@acornf.com.

Question 28

Does Acornia offer services outside Pune?

Accepted Answer

Yes. While our office is based in Kothrud, Pune, we serve clients across India and internationally. Our NRI investment services cater to non-resident Indians in the US, UK, UAE, and other countries. All onboarding and communication can be done digitally — clients do not need to visit our office in person. We use the InvestWell client portal for paperless transactions, portfolio tracking, and reporting.

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