faqs

We have put together a list of questions categorized by topic. This list will hopefully answer all your questions about Arihant.

If you don't find the answer here, please call us on 0731-3016100 or 022-42254800. Alternatively, you can email us. your query online.

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Q ) What can I invest in with Arihant?

A )We offer you're a diversified basket of product offerings that you can invest in namely Equities, Derivatives, Commodities, Mutual Funds and IPO.

Q ) Does it cost me anything to open an account?

A ) In this case, you should immediately surrender the share certificates to Arihant Capital Markets Limited at its registered office or to Ankit Consultancy Pvt. Ltd, R&ST agent, if the duplicate share certificates have been issued. However, if you find the original share certificates before you have completed the procedure to obtain duplicate copies, you can inform Arihant Capital Markets Limited at its registered office or Ankit Consultancy Pvt. Ltd at the earliest so that the caution marked on those certificates can be removed.

Q ) What documents are required to open a trading account?

A )List of documents required to open a trading account:
Proof of Identity - Copy of PAN Card (3 Copies self attested )
Bank Proof - Copy of Bank Pass Book or Personalized Cheque leaf
Demat Account Proof - Demat Account Statement or Account Opening Letter (If you have a Demat Account)
Photograph - 2 (Two) recent passport-size photographs
Account openingCheque to be drawn in favour of "Arihant Capital Markets Ltd"
Proof of Address - Copy of any one of the following (Self Attested)

  • Passport, Ration card, Voter's ID, Driving license
  • Electricity bill (not more than 2 months old)
  • Landline Telephone Bill(not more than 2 months old), Bank Pass Book

For Online Trading customers:In addition to the above documents, you need to submit an Online Trading Registration Form. For more information on documentary requirements or to open an account click here.

Q ) How can I get a copy of an Arihant's Research Reports?

A )Equity research is generally available only to the clients of Arihant; please contact your Financial Advisor. Some research reports are available to the general public. Please call your local Arihant office/investment center or contact our customer service department.

Q ) How can I get a copy of an Arihant's Research Reports?

A )Equity research is generally available only to the clients of Arihant; please contact your Financial Advisor. Some research reports are available to the general public. Please call your local Arihant office/investment center or contact our customer service department.

Q ) How much money should I put in for investments?

A )To begin with, you should invest an amount that you would be willing to keep invested for long-term, say a period of 2 to 5 years. You don't have to necessarily block this amount for a long term and if price goes up in a few months time then you can very well sell the shares and make profit.
However, mentally you should not expect to withdraw your money for short-term needs. If the company you have invested is the right pick and you are willing to wait till the price goes up then you would benefit over a longer period of time.

Q ) What type of account do I need to trade online?

A )You will have to open either an Invest Ease or tradingMaster account to trade online. The former is an online trading account designed especially for investors or seasoned investors. Trading Master account is for active traders. For more information click here.

Q ) Does Arihant offer derivatives trading?

A )Arihant offers direct access to the futures and options markets through our trading platforms. If you are not comfortable trading online, then we have offline channels to trade in derivatives.
Futures and Options involve risk and are not suitable for all investors. Prior to buying or selling an option, it is important that you read the Risk Disclosure Document. No statement in the documents should be construed as a recommendation to buy or sell a security or to provide investment advice. Derivatives are not suitable for all investors, and you must balance the opportunities of options trading with the corresponding risks involved.

Q ) Does Arihant send account statements? Can I view my statements online?

A )Arihant sends you your trading account statement every 6-months and your demat account statement every quarter.
You can view your current Trading and Depository statements online – anytime, anywhere through our Online BackOffice Support that can be accessed through our Web site. These reports may be downloaded to your computer where you may then print or save the statement.
The trading data reports are available for viewing everyday, 24 hours a day. The trade data of current trading day is usually updated by 18:30 hrs.

You can make money from a mutual fund in three ways

Funds will also usually give you a choice either to receive a cheque for distribution or to reinvest the earnings and get more shares.

  • Income is earned from dividends on shares and interest on bonds.
  • If the fund sells securities that have increased in price, the fund has a capital gain.
  • If fund holdings increase in price but are not sold by the fund manager, the fund's shares increase in price. You can then sell your mutual fund units for a profit.
  • Funds will also usually give you a choice either to receive a cheque for distribution or to reinvest the earnings and get more shares.

    Track Performance of Mutual Fund Schemes

Mutual funds provide a relatively easy way to invest. Most funds have a minimum investment of Rs 5,000. Most of the funds also offer a Systematic Investment Plan wherein you can invest a pre-determined amount every month which can be as low as Rs 100.

SIP: All you need to know about Systematic Investment Plan

Here are seven key reasons to invest in mutual funds

1

Diversification: The pooled money of mutual funds is invested in a number of different stocks or bonds, in different asset classes or sometimes even in different countries around the world. Diversification reduces the overall risk of a portfolio; as losses incurred in a particular company/sector can be offset by gains made in other areas.

2

Expert management: Your money is in the hands of experienced, professional managers who are there to try and make sure that the fund delivers on its objective. The average consumer does not have the time or resources to gain enough knowledge to become a confident stock picker. Mutual fund portfolio managers have the expertise and resources to do the required in-depth research to make profitable investments.

3

Choice: You can choose from thousands of funds – you're sure to find one that suits your investment objective and risk profile. And you can get information on them easily. You will often have the option of choosing between income and growth while in your chosen fund.

4

Liquidity: Unlike other asset classes, mutual funds provide you the convenience to redeem your funds at market price anytime you need cash

5

Access to new markets: Certain funds allow you to invest in foreign markets that otherwise would be inaccessible. Not only accessibility but even expertise of fund managers comes handy while investing in new markets.

6

Convenience of small investments: If you invest directly in shares, you may not be able to diversify across a wide array of securities due to small size of your investments and inherently higher transaction costs. However, a mutual fund allows you to invest in a diversified array of securities even with amounts as low as Rs. 100*.

7

Tax Benefits: Mutual funds offer a variety of tax benefits to investors. For example, dividends earned through investment in mutual funds are tax-free. Investments upto Rs 1.5 lacs in Equity Linked Saving Scheme (ELSS) are exempt from tax under section 80C.

There are various types of mutual funds to choose from depending on your investment objective, time horizon and profile.

Funds that invest in equity or shares are called equity funds. The principal objective of equity funds is to earn capital appreciation on investments over long-term (> 5 years). The returns in such funds are volatile since they are directly linked to the equity markets. There are four major types of equity funds as follows:

Diversified funds: They diversify their fund allocation across various sectors and thus minimize the risk of over-concentration in any one particular sector. Over the long term, diversified equity funds have the best track records.

Tax Saving Funds (ELSS): These funds offer tax benefits to investors under the Income Tax Act. Equity linked saving schemes (ELSS) offer tax benefits under Section 80C and have a compulsory lock in period of three years. For more information on ELSS schemes, click here.

Index funds: These funds try to mirror the performance and risk characteristics of a particular index, like the S&P CNX Nifty or the Sensex. The value of the index fund varies in proportion to the benchmark index. Indexing, also called as passive management, tries to mirror the performance and risk characteristics of a particular index, like the S&P CNX Nifty or the Sensex. These funds generally have lower expenses since index fund managers do not need to spend time and resource to research and visit companies, nor do they buy and sell securities as frequently and therefore their transaction costs are lowered. Advantages:

  • Cost : These funds generally have lower expenses since index fund managers do not need to spend time and resource to research and visit companies.
  • Diversification : Index funds can provide exposure to multiple industries.
  • Simplicity : Index funds are easy to understand and manage. You don't need to guess the investing styles of different managers.

Sector funds : These funds invest primarily in equity shares of companies in a particular business sector or industry. As these funds take exposure in a single sector, the concentration risk is high. Their performance is aligned with the performance of the sector in which they are investing.


Debt funds aim to provide regular and steady income to investors. These schemes predominantly invest in fixed income securities such as bonds, debentures, government securities and commercial papers. Capital appreciation in such schemes may be limited. These are ideal for:

  • People with a need for capital stability and regular income
  • Low tolerance for risk or looking to diversify with a more conservative investment
  • Want to generate income or preserve capital
  • Need tax-deferred income
  • Have a short investment horizon

Hybrid Funds: They aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn. They invest in both shares and fixed income securities in the proportion indicated in their offer documents. In a rising stock market, the NAV of these schemes may not normally keep pace, or fall equally when the market falls. These schemes are ideal for investors looking for a combination of income and moderate growth. The most popular hybrid schemes include Balanced Funds and Monthly Income Plan. To know more about MIPs, click here.

Gilt Funds : These funds invest in Central and State Government securities and are best suited for the medium to long-term investors who are averse to risk. Government securities have no default risk however since these are mark-to-market related securities they are not risk-free, as per the common misconception.

Liquid / Money Market Funds : These funds invest in highly liquid instruments such as treasury bills, certificates of deposit, commercial paper and inter- bank call money and offer easy liquidity. The period of investment in such schemes can be as short as a day. They have emerged as an alternative for savings and short-term fixed deposit accounts with comparatively higher returns. These funds are ideal for corporates, institutional investors and business houses who invest their funds for very short periods.

Investors with the following profile should invest in money market funds

  • Investment goals have a short time horizon
  • Low tolerance for risk or looking to diversify with a more conservative investment
  • Looking to generate fixed income
  • Need liquidity

Here's the Risk-Return Matrix of various mutual fund schemes


Okay, so now you know what mutual funds are, where to find out information about them, and the different types of mutual fund schemes. The next important thing you need to know is how to choose the right mutual fund scheme for investment?

Choosing the right mutual fund scheme out of thousands of schemes available can be daunting. But it is much easier than it looks. Let us tell you how through the following steps:

Identify your investment objective

Different people have different needs. Therefore your choice of mutual fund scheme will vary based on your investment objective, age, lifestyle, risk profile, investment horizon, and family commitments among many other factors. You should ask yourself:

a. Why do I want to invest?

  • I need regular income
  • I need sufficient funds for my daughter's wedding
  • I want to buy a house
  • I need to raise fund for my children's education
  • I need extra cash

b. How much risk can I absorb?

Based on your risk taking capacity you can be categorised as:

  • Very conservative: Liquid and money market funds are best for you
  • Conservative: Money market and debt funds are best for you
  • Moderate: Balanced funds or a mixture of equity and debt funds is the right solution
  • Aggressive: Predominantly equity funds will suit you
  • Very aggressive: Equity diversified, international equity and sectoral funds are best for you

c. What is my investment horizon?

  • I want to invest my idle funds for two months: Money market funds is the right solution
  • I need cash to pay off my load in one year: Debt funds will be more suitable for you
  • I want to invest for my child's education in eight years: Equity Funds will be the right solution

Read How to build a mutual fund portfolio

To determine what asset class is best suitable to you read the Knowing yourself section of Building your portfolio

Once you have done a self-analysis you need to select a scheme category that matches your investment objectives:

  • For Capital Appreciation go for equity sectoral funds, equity diversified funds, index funds or balanced funds.
  • For Regular Income and Stability you should opt for income funds/MIPs.
  • For Short-Term Parking of Funds go for liquid funds, floating rate funds, short-term funds.
  • For Growth and Tax Savings go for Equity-Linked Savings Schemes.

Investment Objective Investment horizon Ideal Instruments
Ultra Short-term Investment 1 day- 3 months Liquid/Ultra Short-term plans
Short-term Investment 1- 6 months Ultra short term/Short-term plans and FMPs
Medium-term investment 1-3 years Bond funds/ G-sec funds
Capital Appreciation Over 5 years Diversified Equity/ Balanced Funds
Regular Income Flexible Monthly Income Plans / Income Funds
Tax Saving Over 5 years with 3 yrs lock-in Equity-Linked Saving Schemes (ELSS)

Now that you have idea about the category of mutual fund that best suits your needs, the right scheme is just on your way.

Do your homework

Fund Performance

Investors often feel that a simple way to invest in a mutual fund is to keep investing in the best performing funds. But they often forget that today's best performing scheme may not give you a consistent performance. It may be by sheer luck that the scheme is currently rated well in performance. Therefore it is important that you choose the Mutual Fund Company, scheme and fund manager with a solid track record of investing in both buoyant and sluggish markets.

When evaluating a scheme consider its long-term track record rather than short-term performance. It is important because long-term track record moderates the effects which unusually good or bad short-term performance can have on a fund's track record. Besides, longer-term track record compensates for the effects of a fund manager's particular investment style.


But remember not to compare apples to oranges: When measuring past performance, always compare similar funds. This means similar asset class, fund objective and financial market. A fund that invests in services sector for instance, should not be compared to a diversified equity fund.

Select the right Fund Manager

Fund Manager

Look for a manager who has a track record of outperforming the competition. Levels of excellence vary. Some portfolio managers are better than others. Another factor considered important is consistent portfolio management style. This quality is the discipline by the fund's managers to establish specific investment criteria and stick with them rather than trying out whatever is in vogue. A checklist for choosing a fund manager:

  • The fund's performance track record
  • Independent ratings of the fund
  • The fund manager's strategy
  • Discipline
  • Awards and industry recognition that have been bestowed on the fund

Other factors to consider

When choosing the right mutual fund scheme also consider the scheme's:

  • Stock allocation: A good diversified fund should have less than 40% of net assets spread evenly across the top 10 stocks in its portfolio and no exceptional concentration in any of these. This helps the fund navigate safely during volatile periods. Stock picks must be consistent with no frequent churning of stocks by the fund manager over the past few months.
  • Asset allocation: Don't overlook asset allocation. This tells you about the spread of assets across stocks, current assets, and cash. Cash reserves of an equity fund can tell a lot. A high cash level may indicate a fund manager's discomfort in staying fully invested in the market. Consistently high cash levels over a few months may probably indicate lack of good stock-picking opportunities. High cash reserves are a good sign in a crashing market, minimizing loss, but the fund must be fully invested in a rising market, maximizing returns.
  • Turnover ratio: This shows you the stock churning in a fund's portfolio. It's measured by considering the number of stocks bought and sold over a certain assessment period. A higher or lower Portfolio Turnover Ratio doesn't matter as long as it's aligned with the fund's investment philosophy. A high turnover ratio can be good for equity funds, though high trading costs can lower your returns. A high turnover ratio fund will be suitable for you if you are an aggressive investor. But value funds must have low churning, as investments are usually long term.
  • Expense ratio and loads: A high expense ratio indicates that your fund is expensive compared to its peers. Currently the expense ratio has a regulatory ceiling of 2.50% for equity and debt funds. You must check the entry and exit loads charged by the fund at the time of entry into and exit from the fund, respectively. NAVs are declared by funds after factoring in the expenses and loads.
  • But remember, a fund with an excellent track record but high expenses is a better investment than a fund with lower expenses but an average track record.

    Now you know how to choose the right mutual fund scheme for investment. If you still are not sure, call our mutual fund advisor on 022-42254843/44 or email is on mutualfund@arihantcapital.com and our executive will get in touch with

Arihant Mutual Fund Reports:

  • Mutual Fund Recommendation Report
  • Best ELSS schemes
  • FMP/NFO Monitor
  • Monthly Mutual Fund Report

Invest in mutual funds with ease with Arihant. Our advisors will help you select the best mutual funds suited to your needs and thereafter you have the choice of investing in mutual funds through the following two modes:

ONLINE

Invest in mutual funds online through your Ahrihant's trading account without the hassle of long applications.

OFFLINE

If you do not have an existing trading account or wish to invest offline, our advisor will help you make the investment by filling in the application form. You need to fulfill MT formalities in case you are a first time Investor, post which you can submit the filled application form and cheque to your Arihant advisor.

There are many mutual fund schemes today in the market that invests in various international indices and international funds allowing you to diversify across geographies. It is a good idea to invest in overseas funds as they offer diversification of the portfolio but they are only suitable for investors with a high risk profile and who have a long term horizon. The exposure to these schemes should not be more than 10% of the overall portfolio.

For more details or to invest in international mutual fund schemes, please contact us.

Every mutual fund issues an offer document which describes the fund's investment policies and objectives, risks, costs (very important), historical performance data, and various other legalese-encrusted tidbits. The offer document, in essence, will describe the investment style of the fund. Nowadays, you can also find the essential information about mutual funds on various Internet sites.

You can begin your research (once you've finished reading our basics of mutual funds) on funds under our News and Markets section where you'll find data and analysis on over almost all mutual fund schemes.

There are various types of mutual funds to choose from depending on your investment objective, time horizon and profile.

Investors often get confused with NAV and try to judge it like a share price. It is a common myth that a low NAV is cheap and a good buy, but that is not the case. You cannot view a mutual fund unit like a share. A company's share price may get overvalued if its price shoots up, but that is not the case with a mutual fund. It is irrelevant how high or low the NAV of a fund is. Let's take an example, say you want to invest Rs 10,000. Irrespective of which fund you invest in, this amount stays constant.

Now let's say that your choice is restricted between two funds with identical portfolios. Since they both have identical portfolios, their value will increase in the same proportion. You may buy the units of one fund at a higher price than the other. But, the percentage increase would be the same.

Hence, your investment of Rs 10,000 will increase by the same percentage, irrespective of the fund you invest in.

So the number of units you get as well as a high or low NAV are irrelevant. Thus, it is the stocks in a portfolio that determine the returns from a fund, the value of the NAV being immaterial. The only instance where a higher NAV will get you fewer units that may affect you is where a dividend has to be received. Dividend is given per unit. So the fewer the units you get, the lesser the dividend. But even here, total returns will remain the same.

So from whichever angle you see it, NAV makes no difference to returns. Mutual fund schemes have to be judged on their performance, risk and other such factors.

An exchange traded fund (ETF) is essentially an index fund that trades like a stock and is listed on the exchange. Like individual equity securities, ETFs are traded on a stock exchange and can be bought and sold throughout the day through a broker-dealer, just like Infosys or Reliance Industries shares.

An ETF is a single security representing a basket of stocks that corresponds to a particular index, say, the Nifty or Sensex or even Gold. The ETFs trading value is based on the net asset value of the underlying that it represents. Much like an index fund, an ETF offers built-in diversification. But because ETFs can be bought or sold within the trading day, they offer the flexibility of a stock.

For more details on ETFs, read ABC of exchange traded funds.