Are you aware of the yield curve in your mutual fund

If you have invested in mutual funds, it is vital to know what the yield curve is and which is applicable for you. The curve is a combination of charts that gives you yield of bonds that are of the same quality but there would be different maturities that are linked up. It would give you the interest rates of the future and it is compared with a simple time vs yields. The curve would give you the rate with which the market are to transact the capital for all time terms. There are different kinds of yield curves.

- Normal yield curve: This condition is matched when there are long term interest rates instead of short terms. The curve in this case would be sloping upwards.

- Flat yield curve: When there is no change in the money market due to interest rates, a flat yield is achieved.

- Steep yield curve: This is quite common during the start of an economic expansion or when a period of recession is complete. The slope of the curve is the difference between the short and the long term yield. This has inputs from inflation and high long term interest rates.

- Inverted yield curve: There would be a downward sloping yield curve when the short term interest rates are higher than the long term interest rates. This is seen when there is high volatility in the market.

It is very important to match your mutual funds yield to the investment you have made and what you can expect from it. 

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How do you redeem a mutual fund scheme & what is a transaction slip?

Most of us invest in mutual funds today and the odd question pertaining redemption of these mutual funds does crop up frequently. The procedure to claim these mutual funds is always not clear and does need a bit of research. If you have purchased the fund from an offline source or an AMC, you would have to go the company office and get the redemption form filled out. This would be available at branches of the insurance company and has to be done offline only.

It is possible to get multiple mutual fund redemptions at once too, so a good idea would be to save multiple trips and make it at one go. It is convenient and easy to fill. Here are the list of information points you need

• -          Name
• -          Folio number (this is to extremely important to get right)
• -          Volume of units
• -          Unites to be redeemed

Once this is submitted to the executive at the office, it would be sent for processing. You would have to submit the bank details for transfer of funds too. You can use the same account that was used at the time of buying for a quicker transaction. The transfer of mutual fund dividend is quite quick to say the least; you can get the amount transferred into your bank within 2-3 working days.

The redemption transaction slip is used to make a redemption claim and is available online too; so make a quick print and fill out your details before you go to claim your dividends.

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