Ch.7 · NAV Calculation Rules · medium
What is the 'minimum balance' rule in mutual fund folios?
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EXPLANATION
Many schemes have a minimum balance requirement (e.g., minimum 100 units or ₹1,000). If a partial redemption would reduce the folio balance below this minimum, the AMC may automatically redeem the entire remaining balance and close the folio. This prevents very small dormant balances that create administrative costs for the AMC and confusion for investors.
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