A mutual fund is the investment made while a mutual fund folio is a unique number assigned to the investor who has invested in the mutual fund. This is quite similar to having a bank account and a bank account number which helps your bank identify you while resolving your queries or reaching out to you with updates.
Mutual fund investments are a market instrument in which investments from different investors are pooled and managed by a fund manager. The fund manager then allocates these funds in various securities across the market as per their discretion and knowledge. It is essential that the professional who manages your funds should have enough experience. It is common practice for fund houses to publish the professional details of their fund managers so that investors are well-informed before they invest in mutual funds. A mutual fund does not have a performance record of its own; it depends on the performance of the underlying assets, which helps investors determine if they should invest in the mutual fund.
On the other hand, the folio number is given to the investor by the mutual fund. A folio is unique to each investor and helps the fund house verify the investor’s authenticity. The fund house assigns the folio and can be different for every fund house. A folio is assigned only after the investor makes the first investment in a mutual fund. Using this number, an investor can make other investments with the same fund house. A mutual fund folio makes it simple for the fund house to keep track of a particular individual’s investments and provide reports, statements and updates of the same. Under the folio number, the fund house also stores the investor’s contact information and transaction history. Therefore, in case of discrepancies in your funds, this number is beneficial for tracking your previous transactions to resolve the issue.
If your investments are online or application-based, then you can track your investments without having to remember your folio number all the time. When an account statement is provided to the investor, the folio number is always present on it. Even if an investor wants to keep track of their investments in the same fund house, it is the folio number that will help them do so easily.