What’s The Best Way To Buy Mutual Funds?

There are a lot of unintended biases that creep into the investment decision making process for investors. One such issue relates to the comfort level associated with dealing with a physical touch point for the investment being considered. This extends to mutual funds too and it is often seen that a lot of investors put their money with a specific fund house due to easy access to a physical branch.

This isn’t the best approach, however, and investors can easily get the same comfort level with a range of options. These should help build a more diversified mutual fund portfolio

The process of investing in mutual funds has changed in the past few years, especially in the aftermath of Covid-19. Earlier, most of the processes needed to be done at a physical location, which required access to the offices of the fund house. However, after pandemic-induced restrictions were put in place, all of the steps related to investing have shifted online. Now, there’s no need to go to a physical touchpoint in order to transact with a fund house.

Thus, one of the main reasons for accessing a physical office is no longer required, and it can be replaced by an online option. Doing things online can still present a problem for many people who are not familiar with the online process, especially when documents have to be submitted.

The office of a mutual fund house is not the only physical touch point an individual can access. The problem with using such physical touch points for access is that with the presence of multiple funds in the portfolio it can make for a tough task to manage and coordinate. This is where the registrar and transfer agents come into the picture. Even they have points of presence across most cities. The good part is that the two main registrars, CAMS and K Fin Technologies, handle multiple mutual funds each, so one can deal with them for access to multiple fund houses.

There are various intermediaries or distributors who also provide services for investors. Those investors who cannot handle all the work themselves or do it online and require assistance can always use their services. They are able to provide door-step services or their offices can be accessed. Many banks also provide this kind of service for several categories of their customers, so a person can use this option depending on their comfort level and convenience. The only thing that they need to be careful about is the kind of service that they are taking and whether this also influences their choice of funds.  

The investor can make the investment management process easier by going online. One way to do this is through the website of the individual fund houses. At the same time, if one is familiar with using applications then the fund houses or even the distributors will have their own applications. There is also an initiative of the mutual fund registrars as mandated by the market regulator whereby all the mutual fund investments can be seen at a single place - mfcentral.com.

Arnav Pandya is founder of Moneyeduschool.