What is more advisable— picking up units of a fund from the old scheme or from the NFO?
Sushma Chouwdhury, Delhi
There is no relationship between the price of a unit and the return. The return is earned on the portfolio, and the price is about how the cake is split. The size of the cake will not change just because you bought it for Rs 20 instead of Rs 10. An existing fund is always a better bet—you can see the portfolio, you have a track record, and you know more clearly what you are buying into. Do not assume a lower NAV to be a discount, as that is not the reference price on which you should base your investment decision when investing in mutual funds.