Oro Wealth: Dedicated to serving Direct Investors of Mutual Funds.

Oro Wealth: Dedicated to serving Direct Investors of Mutual Funds.

Mutual Funds, as the term suggests, is funds mutually collected for investment. Earlier these investments were done through different agencies on a commission basis. But these days, people prefer to invest directly to save on commissions charged by such agencies.

However, there is a catch. Everyone is not financially smart or knowledgeable to invest directly. And investments involve risk. Most small time investors have demanding jobs and do not find time and energy to analyze different funds.

Many Direct Mutual Funds depend on ratings given by various agencies. These ratings are based on Risk to Return ratio. A better rating means more return for less risk. Though these ratings are trustworthy, managing investments is not easy. The amount to be invested, the period for which one wants to invest, the desired liquidity, etc also play a role in choosing the right plan.

Then, there is paperwork involved, forms to be filled, applications to be made, all of which can be confusing to a layman. After investing, you have to keep track of your investments, see which plans are performing well and get rid of underperforming plans. You may also have to manage investments of other members of your family.

This is where Oro Wealth comes in.

1.       Oro Wealth will suggest the best plans for your specific requirements.

2.       They will help you understand the different plans and the criteria involved in decision making.

3.       They will guide you in your choice of the best plan.

4.       They will also do the paperwork for you.

5.       They will keep an account of your various investments.

According to Mr. Nitin Agarwal, co-founder, Oro Wealth, “Using a single ID, investors can manage their family’s account”, which makes Oro wealth truly user friendly and hassle free.

Parameters for investing in Mutual Funds Directly

Parameters for investing in Mutual Funds Directly

Mutual fund is a pool of money invested by many people for long term profit.

Usually, when this investment is done through an agency, distributor or online portal, they deduct commission from the amount you would like to invest, and only the balance is invested in a mutual fund. Though the commission amount is not very high (1%-2.5%) if the amount invested is high the amount of commission in Rupees rises.

Similarly, if the period of investment rises, the commission rises and this amount in absolute terms can be quite high. An investor can get returns on this amount too by investing directly in Direct Mutual Funds and thus saving the charges levied as commission.

Of course, this saving is directly proportional to the commission. The benefits of direct investment will be greater in such funds where the commission charged is higher or on a recurring basis. Moreover, more benefits will accrue from direct investment only if the amount being invested is high.

While selecting a plan due to importance should also be given to the performance of the fund, its ratings, the risks and returns involved and its suitability to your reasons for investment. The lock-in period and liquidity of the fund are also to be considered.

To sum up, it is important to analyze the benefits of different funds on the following parameters before investing directly in any mutual fund:

1.       Amount to be invested.

2.       Period of investment.

3.       Risk to Return ratio.

4.       Lock-in Period

5.       Liquidity.

Different types of Mutual Funds in India

Mutual Funds are for those who are on the lookout for investing in options that can allow for a reasonable amount of monetary return without endangering their finances too much. This is what has partly fuelled the entire focus towards mutual funds in India. Structured investments where the money is spread wide to decrease the risk of loss, mutual funds vary based on either the accessibility to new investors or the amount of capital that it asks for an investor to pledge into it. So the variants can be as follows:

1) Open-ended or closed-ended (based on whether new investors can be added continuously or not)

2) Small-cap, mid-cap or large-cap (determined through the size of one’s corpus)

There is a wide array of types of Mutual Funds in India to look at, but let’s understand the four main ones viz. Equity or Growth Funds, Debt or Fixed Income Funds, Liquid Funds or Money Market Funds and Hybrid or Balanced Funds.

Equity Funds invest in equity shares. They are high risk funds as the returns you get are in direct correlation to the stock markets. These funds are ideal for those who desire growth in the long term.

Debt Funds invest in fixed income securities like government securities, treasury bills, debentures, corporate bonds, commercial papers and other money market instruments. These funds have low risk as compared to equity funds and are well suited for medium and long term investor seeking regular and steady income growth.

Liquid Funds invest in liquid money market instruments. The investment period could be as short as a day thus making it easy to liquidate your investments. These are ideal for short term investors and corporate workers looking to invest for a short period.

Hybrid Funds invest in both equity and debt instruments, thus giving you the benefit of both equity and debt funds i.e. investment growth and steady income. These are well suited for medium and long term investors who are willing to take moderate risks.