Can a mutual fund change its investment objective?
Oct 11, 01:10

Regulations allow a mutual fund to change its investment objective, but only after it gives a 30-day window to unitholders for exiting the scheme without charging any exit load. The fund house also needs to send a written communication to every unitholder about the proposed changes. Moreover, if a scheme has existed for less than a year, then it also needs the approval of 75 percent of the unitholders. After the change, investors need to check whether a scheme is still aligned to their risk-return expectations. Financial planners usually ask investors to exit if the new objective is not aligned to their risk-taking ability, even if past returns have been good.

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