Are you ready to invest directly in mutual funds (MFs) without the help of any intermediaries such as brokers or distributors? With the advancement in technology, there are now various avenues for investing directly in MF schemes from the comfort of your home.
One can invest through the websites or apps of individual asset management companies (AMCs).
However, if you wish to invest in schemes of different AMCs, this may not be the best option. It will be time-consuming to register with each AMC whose MF schemes you want to invest in.
There are mutual fund aggregators such as Paytm Money, Groww, FundsIndia, Coin (by Zerodha) and Fisdom, that enable you to invest across multiple schemes and fund houses.
Another option is to invest through MF Utilities, an MF transaction aggregation portal set up by all the AMCs together, to provide a common platform for investing in MFs. Here is a low-down on the MF Utilities (MFU) platform and how it fares against other MF aggregators.
Currently, 39 AMCs have registered with MFU, which allows purchase, redemption and switch of multiple schemes of various AMCs on a single platform. MFU also allows registration of systematic investment plans (SIP), systematic withdrawal plans (SWP) and systematic transfer plans (STP).
All your transactions on the MFU platform will be carried out through a common account number (CAN) allotted to you on registration.
You can create a CAN completely online by submitting self-attested specified documents through the eCAN facility on the portal. But for this, you must be a KYC-compliant customer (other than eKYC) through any of the existing KYC registration agencies and your bank details must be registered with one of the participating AMCs.
Investors who don’t satisfy the above conditions will have to physically submit the required documents at any of the MFU points of service (POS) centres to generate a CAN. The list of POS locations is available on the MFU website.
CAN is an industry-level folio which holds basic details such as name, KYC status, nomination, nationality, bank and contact details, central for all mutual fund scheme investments.
CAN also enables a single consolidated pay for purchases of multiple schemes across AMCs on the MFU. For SIPs, just one bank debit mandate through a facility — PayEezz — will facilitate the registration for multiple SIPs.
One can access MFU on its website — www.mfuindia.com — or through its app – goMF (Android and iOS).
It also offers value-added services such as alerts, triggers and reminders to help investors monitor their investments.
Pros and cons
Promoted by the Association of Mutual Funds of India (AMFI), MFU is a not-for-profit company and offers its services to investors free of cost.
The interface is simple, sober and provides a drop-down menu with the list of funds and schemes.
This is unlike the interfaces of MF fund aggregators which display funds under various categories in a hierarchical order based on a few metrics such as ratings or past returns.
Thus, before investing through MFU, you should do a thorough research and decide on the scheme you want to invest in.
Many users of the MFU also point out that the platform does not show the rate of return on the existing investments of the user. The dashboard on investor holdings shows the list of schemes, the number of units held, current value of each fund, scheme folio number and the current total value of an investor’s MF investments. The lack of information on return on investment is something that most users seem to find disappointing.
Also, MF Utilities doesn’t provide portfolio insights such as sectoral exposure, asset holdings, and other important ratios such as Sortino and Sharpe, as a few mutual fund aggregators do.
On the other hand, the benefits of using the MFU platform include the option to view the consolidated statement of all the mutual fund investments, anytime, even if the investment was not made through the MF Utilities platform.
In the case of commercial MF aggregators, this option is not readily available and has to be requested for, and you also need to grant access to aggregators to your e-mail for reading the CAS from CAMS or Karvy.