NEW DELHI: Direct mutual funds are a type of mutual fund investment where investors purchase units directly from the mutual fund company, rather than through a financial intermediary such as a broker or advisor. By investing directly, investors can bypass intermediary fees and commissions, potentially increasing their returns. However, with direct investing, investors are also responsible for conducting their own research, managing their portfolios, and making investment decisions without the benefit of professional advice.
Investors can invest in direct mutual funds both online and offline. Online investing is done through the mutual fund company’s website or through online investment platforms, and is a convenient and efficient option for those who are comfortable using technology for financial transactions. On the other hand, offline investing involves visiting a mutual fund company’s branch office or sending in a physical form to make an investment. This option is better suited for those who prefer a more hands-on approach and face-to-face interaction with a representative of the mutual fund company.
You can invest in a mutual fund online or offline if your KYC is done. If you’re not comfortable online, you can do it through an AMC (Asset Management Company) branch.When you buy a direct mutual fund or a direct plan of a mutual fund, you are purchasing it directly from the AMC RT (Real-Time) platform without the involvement of any intermediary or distributor. This means that you bypass the fees and commissions charged by intermediaries, potentially increasing your returns. When investing in a direct mutual fund, it is important to understand that you will be the “driver” of your financial portfolio, which means you will be responsible for conducting research, selecting the right funds, monitoring performance, and making any necessary adjustments to your portfolio.
This requires a good understanding of the different types of mutual fund schemes and which one is best suited for your investment goals and risk tolerance.
When investing in a direct mutual fund, it is important to have a clear understanding of your financial goals and plans in order to choose the right mutual fund scheme. Based on your financial goals, you can determine your investment horizon, risk tolerance, and return expectations, and choose a mutual fund scheme that aligns with these factors.
Source: ET Now