For direct mutual fund investors with their prior experience in the stock markets, SEBI has yet again come with a move that is sure to delight them. As instead of the hassle of going across AMC sites they would now be able to buy and redeem direct mutual fund plans via stock exchanges. So far, this platform is available only to some of the registered investment advisors who access the interface for setting SIPs, SWPs or STPs among others.
What are Direct Mutual Fund Schemes?
Direct plan of a mutual fund scheme includes the same set of securities in the same proportion as a regular scheme but with low fund management cost have lower NAVs. This cost benefit though seems negligible results in better returns for the investors as fund administration and operating charges are recurring in nature.
In the present context MF investors if they want to invest in direct plans they have the following options available.
1. Through mutual fund house:
If doing so through the online route, you can visit the respective site of your chosen mutual fund house; fill in the form and tick on the box when opting for the direct plan.
2. Online portal or aggregators:
As the demand for the product has increased so are the modes for buying the same. Various portals have come in last few years such as Paytm Money, Groww, Kuvera.in etc. Also, there is Mutual fund Utilities that is an aggregation platform owned by a number of AMCs. For the direct plans, once you are done with the usual KYC after you subscribe to the direct plan you will be allotted a Common Account Number or CAN.
3. Registered advisors:
You can also go for direct plans offered by these registered financial advisors who also provide an array of advisory related services for a costs.
4. Through Mutual fund registrars:
CAMS and Karvy are the 2 principal registrars which manage all of the leading funds. And if you are someone seeking direct plans in mutual funds, you can always visit the website of these registrars with a limitation that they provide direct plans only for AMCs whey they happen to be the registrar.
Stock exchange Platforms for Mutual fund transaction
There are platforms that assist advisers in placing investors' applications including BSE Star Mutual Fund and NSE NMF II and the likely step in the direction will further provide a fillip to these interfaces.
What will Change with Mutual Funds being Available for Investors on Stock Exchanges?
With the availability of stock exchanges as an option to buy mutual fund (direct plans), investors will be able to get the same day's NAV. This is however not the case with MF Utilities if you opt for robo-advisory on choosing a scheme as in such a case there is an earlier cut off to get the same day's NAV. This is because the platform for the processing of the transactions deals with exchanges who send them to R&T or registrar and transfer agents.
So, with stock exchanges as your chosen destination for buying mutual funds, you will not be able to get bespoken portfolio advice.