Thread by @Ravisutanjani

Which Mutual Fund Apps are best for Investing? 📈💰

This is the most common question I hear so here’s an explanatory thread. 🧵⬇️

#FridayInvesting #PersonalFinance

We have around 44 AMCs (Asset Management Company who manages your fund) that offer more than 2500 mutual fund schemes.

Yes India is one of the fastest-growing markets for Equities Investments. 📈

And there you have dozens of third-party apps extending Mutual Fund related offerings,

• Zerodha Coin
• Groww
• Kuvera
• INDMoney
• Paytm Money
• ET Money and more

And two RTA’s apps:
• CAMS
• KFinKart (Karvy)

Before we move let’s understand how does the order flow works when you invest your money in MFs:

When you place a Purchase (Buy/Sell) order on any app, they place it on your behalf with the RTAs (Registrar and Transfer Agents who maintain KYC and recordkeeping).

RTAs share the order instruction and funds with AMC, then AMC will allocate units based on the NAV (Net Asset Value) subjected to the date of funds realization.

There are few aggregators who process the transactions on behalf of the MF Apps, BSE Star is one platform developed by BSE that facilities thousands of orders every day.

financialexpress.com/money/mutual-f…

Now here's a very interesting point, all 3rd-party new age Mutual Funds apps offer a good user experience, make the purchase easy, also offer a variety of conveniences but what’s the problem?

It’s the TAT, when you transact you should be careful about the date of NAV allocation.

As many entities will be involved it will delay the allocation cycle. When you use any third-party app, they transfer the money to BSE Star which then transfers it to AMC where multiple steps are involved.

Tech failure can happen and it's normal since a lot of people invest when they see the market fall on a certain day.

Also, all the 3rd part platforms (Kuvera, INDMoney, Groww) has a payment gateway that takes their own sweet time to process and pass ahead.

That's where the entire issue comes and the reason for not getting same-day NAV.

When you transact directly on the AMC website/RTAs you reduce the TAT that benefits you get the same day or next day allotment if transacted before the cutoff time.

But in the case of all third-party apps, it usually takes 2-4 days for allotment. It’s not good for lumpsum (one-time) investment as you may be tempted to get more units if the market is down.

Okay, let’s learn this in simple terms!

Imagine the market is down 500 points today, and it's 2 PM, Can you just enter at those lows via Groww or Kuvera? Will you get NAV of the next day or that fall day?

I’ve been investing in Mutual Funds since I was just 17 years old (Had a minor PAN Card). Gradually \I’ve shifted all my direct funds to RTAs (CAMS and Karvy), they offer better convenience and peace of mind.

There’s one another myth I come across that says what will happen to my investment if the App (Groww, Kuvera, Paytm Money, etc) will shut?

The answer is pretty clear, your fund units are always held in the statement of account (SOA) form or in a Dematerialized (Demat) account.

You can always refer to the CAS and CDSL.

So all these apps are just a 3rd party platform that helps you facilitate the order, they’ve to anyway pass through RTAs, so if you’re a long-term investor going directly with AMCs and RTAs platform is highly recommended.

You can always export your CAS to these platforms, it will work across everywhere.

Hope you enjoyed reading this 🧵, next time when you come across any such events do consider the pro and cons.

Thanks for reading! 🙌 Please RT the first Tweet so it reaches more people. 🙏

Bonus - Refer to another Interesting Thread if you want to learn more about Credit Cards 💳⬇️

https://twitter.com/Ravisutanjani/status/1409926710418501635?s=20