SEBI’s New Tool to Help Investors Reclaim Forgotten Mutual Fund Investments

By Penny Counts 

Have you come across a situation when you found out an old mutual funds statement and wondered, what have you done to this investment or what would be the fund value. Yes there was a time when having registered PAN or mobile number wasn't mandatory and tracing such investments would have proved a nightmare. The difficulties multiplied if you are trying to trace the investments and other financial details of the deceased. Did you know that over ₹35,000 crore worth of mutual fund units and dividends lie unclaimed in India? Additionally, unclaimed insurance funds estimates range from ₹22,000 crore to ₹27,000 crore, while ₹27,000 crore is apparently stuck with the employee provident fund organisation (EPFO), according to Bank Bazar. That’s not just forgotten money — that’s hard-earned wealth left idle, often simply because investors or their families lost track of it.

Whether it’s due to a change in address, lack of a nominee, or just plain oversight, many mutual fund folios go untouched for years. Thankfully, the regulator i.e. Securities and Exchange Board of India (SEBI) has stepped in with two powerful, tech-backed solutions: MITRA and DigiLocker.

Let’s understand how these tools work and how you can use them to secure your investments for yourself and your loved ones.

MITRA: Tracing Forgotten Mutual Fund Investments

MITRA (Mutual Fund Investment Tracing and Retrieval Assistant) is an initiative launched by SEBI, it is a centralized platform designed to help investors (and their legal heirs) track down unclaimed folios — those with no transactions (financial or non-financial) for over 10 years. MITRA can be used by original investors, nominees, and legal heirs with supporting documents.

Key Features of MITRA:

• Centralized Search Portal: MITRA provides a single window to search across all mutual funds in India.
• User-Friendly Access: Anyone can search using basic details like PAN, mobile number, email, or folio number.
• Covers All RTAs: Developed with support from CAMS, KFintech, and other RTAs, covering most mutual fund houses.
• Supports Claims: Allows rightful claimants to initiate the recovery process directly through the platform.
• Free of Cost: No charges involved for using the1 service.

Why is MITRA Important?

In many cases, folios go unclaimed because:

• The investor has moved or changed contact details.
• Nominee details were never added.
• Heirs are unaware of the investments.

How Does MITRA Work?

Developed by the KYC Registration Agencies (KRAs) — CAMS and KFin Technologies — MITRA simplifies the search process across multiple fund houses through the MF Central website (www.mfcentral.com). Here’s how it helps:

1. Enter Basic Information: Provide key identifiers like your name, PAN, date of birth, bank account number, or mobile number.
2. Smart Matching: If there’s no exact match, MITRA digs deeper using secondary details such as your address, city, nominee name, or PIN code.
3. Verification Required: Once a match is found, you’ll need to contact the respective fund house or KRA to verify your claim. Typical documents include:
   
• Proof of identity (PAN, bank details)
• Death certificate and legal heir proof (for nominee or heir claims)

💡 Tip: The more precise the information you provide, the higher your chances of success. Old folios with missing or outdated data may be harder to match.

DigiLocker: Making Inheritance Seamless

SEBI has also integrated investment tracking with DigiLocker, a government-backed digital storage platform that securely stores your important documents — including your mutual fund and demat account details.

Key Features of DigiLocker for Investors

• Centralised Document Storage: Upload your mutual fund and demat account statements or summaries in one secure digital place.
• Nomination Facility: Add a trusted nominee — such as your spouse, child, or another family member — who can access these documents in the event of your death.
• Automatic Access After Death: DigiLocker is linked with official death registries. When your death is officially recorded, your nominee will automatically get read-only access to your investment details. This makes claiming investments straightforward and hassle-free.

Why This Matters: A Wake-Up Call for All Investors

These new systems from SEBI are not just digital upgrades—they’re essential safety nets for families who might otherwise lose access to hard-earned investments. Over time, countless crores have gone unclaimed simply because details were outdated or families were unaware of their rights. These tools offer a chance to reclaim what’s rightfully yours, but they also highlight a deeper responsibility for every investor. To ensure your legacy isn’t lost in bureaucratic limbo, it’s vital to:

• Regularly update contact and nominee details.
• Store investment documents securely and accessibly.
• Inform our families about where and how to find our financial assets.
• Leverage tools like MITRA, IEPF, and AMFI’s unclaimed amount search to trace old or forgotten assets.

Think of this not just as financial housekeeping, but as a thoughtful act of protection—ensuring your loved ones aren’t left scrambling or unaware in a moment of need.

In Conclusion: Preserve What You’ve Built

Your investments represent years of hard work, discipline, and planning. Don’t let them fade into obscurity due to missed updates or forgotten details. With SEBI’s tools like MITRA and DigiLocker, you now have the means to secure your financial legacy and ensure it reaches the hands of those it’s meant for.

Take a few minutes today to:

• Check for unclaimed mutual fund investments at mfcentral.com
• Upload important documents and set a nominee in DigiLocker

This simple act of responsibility could one day make all the difference—for you and for your loved ones.

(Penny Counts is an upcoming venture dedicated to helping you with financial planning, debt management, investments, and personal finance. Reach out to the author for assistance.)

Margin of Safety: A Timeless Investment Principle

By PennyCounts

Benjamin Graham, the father of modern investment theory, first introduced the concept of margin of safety. Warren Buffett, his most famous student, adopted and championed the principle throughout his legendary career. The margin of safety is exactly what it sounds like—a cushion or buffer to protect against errors in judgment, valuation, or unforeseen market developments, which is not uncommon in investing.

What Is Margin of Safety?

At its core, the margin of safety is the difference between a stock’s intrinsic value and its market price. If you estimate a company's intrinsic value to be $100 and it's trading at $70, your margin of safety is 30%. This cushion helps reduce the risk of losses if your valuation proves overly optimistic.
 
Formula:
Margin of Safety = (Intrinsic Value - Market Price) / Intrinsic Value × 100%.

Why Margin of Safety Matters 

1. Risk Mitigation: The stock market is inherently unpredictable. By buying at a discount to intrinsic value, investors shield themselves from negative surprises.
2. Long-Term Stability: A wide margin of safety allows investors to ride out short-term volatility with confidence, focusing on long-term fundamentals instead.
3. Psychological Comfort: Knowing there's a cushion reduces emotional decision-making and promotes rational analysis—especially in turbulent markets.
4. Better Decision-Making: When you know you're buying at a discount, you're more likely to stick with your investment thesis and avoid herd mentality.
5. Capital Preservation: Paying less than something is worth helps protect your invested capital—crucial for risk-averse or retirement-focused investors.
 
Factors That Influence Margin of Safety

1. Intrinsic Value Estimation: The margin depends on how accurately you calculate intrinsic value. Misjudgments skew results.
2. Market Fluctuations: Changes in stock price affect the margin in real time.
3. Economic Conditions: Inflation, interest rates, and macroeconomic shifts impact valuations.
4. Company Performance: Strong fundamentals support a narrower margin; weaker firms need a wider one.
5. Investor Sentiment: Fear and greed can distort market prices, influencing your margin.
 
How Much Margin of Safety Should You Aim For?
 
A minimum 25% margin is often recommended by experienced investors. Shakier businesses or volatile sectors require an even larger cushion.
 
“Better to be approximately right than precisely wrong.” — Warren Buffett
 
Practical Application: Finding a great company isn’t enough. Buying it at the right price is just as important. Consider Coca-Cola in the late 1990s. Despite its strong business, investors who paid 50 times earnings struggled to earn decent returns.
 
If you believe a stock is worth 50 times earnings, paying 40 times instead adds a layer of safety in case your assumptions are wrong.
 
Always include a margin of safety when investing. Pay less than you think the business is worth. For stable companies like Walmart, a 20% margin might suffice. For cyclical or unpredictable firms, go higher.
 
Don't let fear of missing out (FOMO) override discipline. Great opportunities often return. Valuation discipline is essential to long-term success.
 
Limitations of Margin of Safety

1. Subjectivity: Intrinsic value estimates are imprecise.
2. Market Volatility: Even undervalued stocks can fall further.
3. Overreliance on History: Past data may not predict future performance.
4. Opportunity Cost: Waiting for a deep discount might mean missing out.
 
Conclusion

The margin of safety is not just a formula—it's a philosophy. It protects against downside risk, supports long-term stability, and fosters discipline in valuation.
 
In an uncertain world, it's one of the few tools investors have to protect capital while staying rational. While not a guarantee of success, it dramatically increases your odds.
 
Respect it. Use it. Build your investment process around it.

How to Turn Investing into a Winner’s Game

Investing is meant to be a winner’s game. The market grows, companies innovate, profits compound, and wealth accumulates. Yet for too many investors, that promise remains unfulfilled. The Little Book of Common Sense Investing by John C. Bogle provides exactly what you need to make investing a true winner’s game.

Why?

Costs. Hidden, compounding, wealth-destroying costs.

Despite bearing all the risk and providing all the capital, the average investor walks away with just a fraction of what the market offers. It’s not because they chose bad stocks or were unlucky. It's because the financial system, with its layers of fees, commissions, turnover, and sales charges, quietly siphons away their returns.

But here's the good news: it doesn’t have to be this way.

You can reclaim your rightful share of the market’s returns. You can turn this loser’s game back into the winner’s game it was always meant to be.

The Math That Can Make—or Break—You

Let’s start with the truth that few in the industry will say out loud: Before costs, beating the market is a zero-sum game. After costs, it’s a loser’s game.

This simple arithmetic means that while some managers beat the market (briefly), they do so at someone else’s expense. And when you factor in costs—fund fees, turnover, sales loads, and taxes—almost all managers lag behind over time.

For example:

A $10,000 investment growing at 7% annually for 50 years becomes $295,000.

The same investment with just 2% in annual costs? Only $114,700.

That’s a $180,000 gap—all lost to costs.

This isn’t theory. It’s the relentless rules of humble arithmetic—a phrase coined by Supreme Court Justice Louis Brandeis over a century ago to warn against financial folly. And it still holds true today.

Why Most Investors Lose

1. They underestimate costs.

Expense ratios (0.8%–1.3%)

Portfolio turnover (adds 0.5%–1% in hidden costs)

Sales loads (often 0.5%+ per year)

Tax inefficiencies (capital gains distributions)

2. They overestimate skill.

Fund managers are smart, but they compete in a zero-sum game.

For every buyer, there’s a seller—and the market is already priced for efficiency.

3. They fall for the marketing.

Slick brochures, star ratings, performance charts—all distractions from the one thing that really matters: cost.

How to Win the Game

So how can you turn this around?

1. Minimize Costs Ruthlessly

- Every 1% you save annually compounds into thousands over time.

- Avoid sales loads. Choose funds with low expense ratios.

- Reduce trading. Every trade incurs costs—even if they're hidden.

2. Choose Index Funds

- Index funds don’t try to beat the market. They own it.

- They’re low-cost, tax-efficient, and reliable.

3. Think Long-Term

- Stop chasing returns.

- Focus on your time horizon, not today’s headlines.

- Let compounding do its job—uninterrupted.

4. Ignore the Noise

- Fund managers, talking heads, newsletters—they all have something to sell.

- Your job is to build wealth, not to entertain yourself with predictions.

The Takeaway

You can win at investing. You just have to stop trying so hard. Sharpen your pencil. Do the math. 

Remember, the market is generous—if you let it work for you, not against you.

Don’t feed the intermediaries. Don’t chase the mirage of outperformance. Own the market. Keep your costs low. Stay the course.

That’s how you turn a loser’s game back into a winner’s game.

- Penny Counts