In how many days the mutual fund manager invest the money?

General
1

In how many days the mutual fund manager invest the money?
Example people invest (all SIP and lumpsum) 10 lakhs on 1st Jan 2024
When will the fund manager invest the 10 lakhs? the same day, next day or anytime?

Is there any timeline within which he needs to invest? Like before 1 Feb 2024 he will have to invest it…

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2

The cash you give us still part of the fund and included in the NAV from the day you pay. It also earns interest as TREPs. It’s not the AMC’s or the fund manager’s money.

You can’t really differentiate between my SIP and your sip. It could be used to support redemptions, or just be a cash holding.

3

Is there any timeline within which they need to utilize/invest the amount received?

4

Actually that’s not how it works. They can collect SIP/Lump sum for many months without investing.

Looks like you’re thinking like this, for example, HDFC bank holding in some fund is 7%, and when you invest 1 lakh in that fund, fund manager has to invest your 7,000 in HDF bank. But that’s not how it works.

So this is how it works.
Suppose you invest in Parag Parikh Flexi Cap Fund. NAV Price today is say 86.40, this is net asset value of their underlying holdings which include cash as well.

Now say you invested 10 lakh, this 10 lakh will be added in their cash pile and you’ll get units allocated at NAV price of that day, which is 86.40.

Now fund manager can collect cash (SIP/Lumpsum) from investors for months without buying any stock. It’ll just increase their cash.

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5

It is strange why there is no time limit within which they should invest the money. (Lumpsum+SIP)

6

Best is to get in touch with the fund manager of the fund you’re interested in and ask him/her yourself.

7

Not strange, sometimes it’s better to sit on cash and wait for opportunity to buy.