Things to verify before you start investing through mutual fund app

Introduction

Considering the recent trend, we can see that mutual funds have been the market’s most trending aspect. With technological advancement, online mutual fund investments are getting easier day by day. It has become paperless, quick, and hassle-free. Therefore, for a long-term approach, the mutual fund can be the one-stop solution to fulfil your dreams, assuring risk-adjusted returns. You can simply use the best mutual fund app like ET Money app to ensure proper monitoring. 

Advantages of mutual fund investments

Currently, nearly 44 AMCs are operating in India, offering several mutual fund schemes across several categories and sub-categories. Mutual fund investments have become one of the most popular investment solutions because of the following advantages:

1. Professional fund management: Most investors lack the relevant knowledge and time for proper asset allocation. For them, mutual fund investment seems like a gold mine as it comes with a professional fund manager who handles it for you.
2. High liquidity: Mutual fund investments generally come with no lock-in period and can be redeemed at any time. Except for close-ended funds, mutual funds can be easily bought and sold.
3. Diversified portfolio: A single mutual fund investment ensures proper allocation of the entire investment among several securities and asset classes, including both debts and equities. This ensures fund diversification and spreads the risk. 
4. Low-cost investment scheme: You can invest with a minimum of INR 500 through SIP. You can choose both SIP and lump sum depending on your preference and suitability.
5. Tax-efficiency: Under Section 80C of the IT Act, certain mutual fund schemes like ELSS offer tax benefits.

Factors to consider before investing through mutual fund app

Although mutual fund investments have become popular, you must carefully consider certain crucial factors before such online investments:

1. Choosing a secured online mutual fund platform

Because of the rising popularity, a plethora of mutual fund apps is in function now. However, not all of them are trustworthy or secure. Choosing the best mutual fund app is a challenge. ET Money app is an award-winning and trusted platform in this respect. However, you need to make a comparative study on multiple parameters like user interface, accessibility, usage, etc., and choose the one that suits you best. Selecting a user-friendly online mutual fund investment platform is the primary step toward secured investment. 

2. Several mutual fund categories possess different risk levels

You have to understand that different mutual fund categories offer different risk levels. During online selection, you must analyse if the concerned scheme suits your current financial status and risk appetite. Always consider checking the riskometer before proceeding with an investment. Any trusted mutual fund app portal will offer all these basic details that you must take into consideration.

3. Regular plans vs. direct plans

During online mutual fund investment, you are eligible to invest in both direct funds and regular funds. In the case of a regular plan investment, the concerned Asset Management Company or the mutual fund house pays a percentage of commission on account of distribution expense, unlike a direct plan investment. In the latter case, there remains no involvement of any commission issue. 

When compared to regular plans, the expense ratio is lesser in direct plans, as the mutual fund distributors remain uninvolved in any sort of direct plan investments. This is the reason why direct plans generate comparatively better returns than regular plans, because of the low Total Expense Ratio. 

4. Track record

Although the past returns of any mutual fund scheme never justify its future prospects, however, it offers a picture of the overall performance of the fund concerned over multiple market phases, helping you make an informed decision. However, certain mutual fund apps never provide any risk ratio input, while some others offer the statistics for only one year. Some of these platforms are also not regularly updated. Therefore, it is essential to consider a prudent track record to ensure the reliability of the concerned scheme. 

5. Customised services

During online mutual fund investment, you have to ensure that the app you follow offers a reliable customisable portfolio option. This ensures better planning of your investments, depending on your risk appetite, objectives, and investment horizon. Certain investment portals offer generalised services, and customised requirements are not fulfilled there. 

Conclusion

Choosing the best mutual fund app proves to be a challenge. However, the ET Money app gains trust and popularity in this context. Before any sort of online mutual fund investment through any app, you must carefully consider all these above-mentioned factors to enjoy fool proof, optimum gains.