How do you invest in a Direct Mutual Fund?
Direct Mutual Fund
What is DIRECT MUTUAL FUND and how do you invest in it? What are the benefits of investing in Direct Mutual Fund? What precautions must be taken when investing in DIRECT MUTUAL FUND?
So let’s first determine
What is the definition of DIRECT MUTUAL FUND?
Direct Mutual Fund simply denotes that there is no intermediary agent in this type of mutual fund.
In general, there are two ways to invest in mutual funds: DIRECT (no agent involved) or REGULAR (agent in the middle, who commission some fee from the investment amount)
As you are aware, a MUTUAL FUND is an investment scheme in which different people invest, and the scheme’s manager invests the entire amount deposited in accordance with the scheme’s predetermined objective in the stock market and other bonds and securities.
Now, when individuals wish to invest in a mutual fund, they have two options: they can either go directly to the parent company of the mutual fund scheme and invest in DIRECT MUTUAL FUND, or they can go to a broker-dealer.
Such as– If you wish to invest in UTI NIFTY INDEX FUND (Mutual Fund Scheme), you can do so directly by visiting the office or website of UTI Mutual Fund and selecting the DIRECT option.
In addition to this, there is a second way to invest in mutual funds: instead of going directly to the mutual fund company, you go to a financial advisor or a financial investment company, and he advises you to invest in various mutual fund schemes. Typically, your mutual fund investments will be invested in a regular scheme, and your financial advisor or investment company will receive a commission.
Even if you invest through a bank, the bank acts as your agent, and you can invest in the mutual fund company of any other company through a bank.
Such asIf you go to SBI Bank and say you want to invest in mutual funds, the bank’s employees will tell you about a variety of schemes, most of which allow you to invest in regular mutual fund schemes, unless you insist on investing in a direct scheme.
Now comes the question of what the actual advantages of investing in Direct Mutual Funds are.
So let’s learn
Investment advantages of direct mutual funds
The greatest advantage of investing in direct mutual funds is that you can directly benefit from the money that goes to the agent as commission from your investment.
The fees charged by DIRECT MUTUAL FUND and REGULAR MUTUAL FUND can vary by 1% to 2% on average.
Long-term, this difference of 1% to 2% can amount to millions of dollars.
This video demonstrates that one percent can make a significant difference in any investment.
Read Also: HISTORY OF THE NSE -INDIAN STOCK MARKET
Must exercise caution when investing in Direct Mutual Funds
Let’s discuss the precautions that must be taken when investing in direct mutual funds, as there are now both advantages and disadvantages to investing in direct mutual funds and everyone should invest exclusively in direct mutual funds.
However, it is not so
Direct mutual fund investing is prudent when
- Determine precisely which fund you wish to invest in.
- When you can manage your portfolio effectively,
- When you have a complete understanding of the risks associated with investing in mutual funds.
- When you understand how certain modifications can be made to this mutual fund scheme, and
- When and how can a better profit be extracted from a mutual fund scheme?
Alternatively, if you are unable to do all of these things, you should consult a good SEBI REGISTERED Mutual Fund Advisor and invest only in regular mutual funds, as you will receive special benefits if you invest in regular mutual funds. Benefits come…
- You are advised in which mutual fund to invest.
- Your agent provides you with the necessary portfolio information.
- You can consult your agent for investment advice.
- The agent assists you with any changes to the mutual fund scheme or other needs.
It is now clear what a direct mutual fund is, what its benefits are, and what precautions you should take when investing in one.
Let’s now discuss how to invest in direct mutual funds.
How to invest in mutual funds direct
Note that, as stated previously, to invest in DIRECT MUTUAL FUND, you must either go to the nearest office or branch of the mutual fund company and select the DIRECT option when filling out the mutual fund application there.
Alternatively, if you can also invest via the mutual fund company’s website or mobile application, this is also a plus.
For more information, contact customer service or visit the website of the mutual fund scheme in which you wish to invest….
Aside from this, there are currently a great deal of other options that enable you to invest in DIRECT MUTUAL FUNDS quickly and easily.
Such as – GROWW, PAYTMMONEY, ZERDOHA COIN, and numerous others.
Therefore, I hope that after reading this article, you have a complete understanding of DIRECT MUTUAL FUND. Please share your questions and thoughts with us by leaving a comment.
Thank you for reading the post in its entirety.