Investing in mutual funds is a popular and effective way to build a portfolio of investments. A mutual fund is essentially a type of investment vehicle that is made up of a pool of funds collected from multiple investors. The collected funds are then invested in different assets such as stocks, bonds, and other securities. This helps investors diversify their risk, as they are indirectly investing in a portfolio of different assets.
Different Types of Mutual Funds:
Equity Mutual Funds:
These mutual funds invest primarily in stocks. Investors looking to participate in the stock market can choose from different subcategories of equity mutual funds such as Large-Cap, Mid-Cap, and Small-Cap funds. Equity mutual funds are best suited for investors who are looking for long-term capital appreciation.
Debt Mutual Funds:
Debt mutual funds are best suited for investors who want steady returns on their investments. These mutual funds invest primarily in fixed-income securities such as bonds, government securities, and money market instruments. The risk level associated with debt mutual funds is relatively low compared to equity mutual funds, making them suitable for investors who want to invest with a low-risk tolerance.
Liquid Mutual Funds:
Liquid mutual funds are one of the lowest-risk investments one can make in the mutual fund arena. A Liquid mutual fund’s primary objective is to generate income by investing in debt and money market instruments with a short-term investment plan of generally 91 days or less. Liquid funds are ideal for investors looking at parking their money for a short duration.
Hybrid Mutual Funds:
Hybrid mutual funds offer a blend of both equity and debt mutual funds to investors. They invest a majority of the corpus in equities and a small part in debt instruments. Depending on the investment, the hybrid fund can be conservatively balanced or aggressively balanced.
Exchange Traded Funds:
Exchange-traded funds (ETFs) are similar to mutual funds. The significant difference is that they are bought and sold like regular stocks and traded on stock exchanges throughout the day. ETFs contain stocks, bonds, commodities, and other assets, making it easy for investors to build a diversified investment portfolio.
In this article, we will compare and contrast various online mutual fund platforms based on their features, fees, and performance.
Features:
Each platform has its unique features to differentiate itself from others. Some platforms offer personalized investment portfolios and customized investment recommendations based on your risk appetite. Others offer robo-advisors that use algorithms to create investment portfolios. Some also provide educational resources helping investors to make informed investment decisions. Therefore, the choice of the platform depends on what services and features are most important to individual investors.
Fees:
Fees are one of the most important factors to consider when selecting an online mutual fund app. Generally, mutual funds have two types of fees: expense ratios and transaction fees. Expense ratios are the fees paid to the fund’s managers to manage the fund, while transaction fees are charged each time investors buy or sell the fund. Online platforms usually have lesser transaction fees compared to traditional financial institutions. Some mutual fund apps like Bajaj Finserv app, offer mutual funds at zero commissions, making them an attractive option for investors.
Performance:
The primary objective of investing in mutual funds is to make a profit. Therefore, investment performance is a vital aspect to consider while selecting a platform. Investors should examine the historical returns of funds on the platform before investing. However, it’s essential to remember that past performance is not a guarantee of future returns.
Some of the top online mutual fund platforms and explore the features they offer.
Groww:
Groww is one of the most popular online mutual fund platforms in India. It is ideal for investors who are new to the market and are looking for a platform with no hidden charges. Groww provides a hassle-free investment experience and does not charge any transaction fees or account opening charges. It is also user-friendly and has a clean and simple interface that guides investors in selecting the right fund.
Paytm Money:
Paytm Money is another popular online mutual fund platform that offers a wide range of funds across different categories. It offers paperless account opening and hassle-free transactions with no hidden charges. Paytm Money also offers a feature called the “Riskometer” which helps investors understand the risk involved in a particular investment. Paytm Money also stands out for its customer support, as customers can reach out to their support team through various mediums.
Zerodha Coin:
Zerodha Coin is a platform offered by the stockbroker Zerodha. It is an excellent platform for investors who are already Zerodha customers and are familiar with the stock market. The platform is easy to use and offers a vast selection of funds from several asset management companies. The user interface is clean and straightforward, making it easy for investors to invest in a few steps.
Bajaj Finserv App:
The Bajaj Finserv App is a user-friendly app that offers investors everything they could need to invest in mutual funds. The app provides a single dashboard for all investments, simplifying portfolio management. The app offers a wide range of mutual funds from different asset management companies, making it easy for investors to choose from a selection of funds. The app also offers real-time NAV updates, which gives investors an idea of how their funds are performing.
Comparing these platforms, one can easily see that each platform has unique features that cater to different types of investors. However, in terms of user interface and ease of use, the Bajaj Finserv app is one of the best platforms. It provides investors with a single dashboard to manage all their investments and offers a wide range of mutual funds from several companies.
The transparency and clarity of the app make it very user-friendly and ideal for beginners who are looking to get started in the world of investment. Additionally, the app offers easy access to customer service, making it easy for investors to get help with any issues they might face.
Conclusion:
Investing in mutual funds online is an excellent option for investors as it offers convenience, savings, and flexibility. However, choosing the right online mutual fund platform is crucial to making sound investment decisions. The app or platform selected should cater to the investor’s unique investment needs, charging reasonable fees, and offering excellent investment performance. By understanding the features, fees, and performance of the various platforms, investors can select the ideal investment platform that suits their needs.