Mutual fund
In the last 18 months, a major change has been seen among people investing in the direct plan of mutual funds. According to the Business Standards report, now the share of investors in direct plan through investment advisors and PMS providers is increasing rapidly. Whereas without any advice, the lead of investors ie DIY (Do It Yourself) has reduced slightly. This change is due to investment methods and market instability.
Two ways to invest in direct plan
There are two types of investors investing in direct mutual fund plan. First, those who choose their own funds without any advice are called DIY investors. Secondly, those who seek the help of investment advisor or portfolio management service (PMS) providers. The main difference between the two is that DIY investors do not pay any fees, while advisors and PMS providers charge in lieu of their services.
What does the data reveal?
According to a report by Business Standards, since January 2024, the assets (AUM) of those investing through advisors and PMS providers have increased by about 64–65%. In comparison, the assets of DIY investors have increased by 47%. Overall, the direct plan of mutual funds has recorded an increase of 41%. This means that now investors are adopting the path of investment with guidance compared to investing without advice.
Why is the demand for investment with the advisor growing?
In recent times, both new and old investors are feeling the need for guidance due to market instability and low returns. Investment advisors and PMS providers consider the market status and provide better investment recommendations, which makes investors in panic and prevent investment. This may be the reason that investors are now preferring to take better investment decisions with the help of advisors amidst the uncertainties of the market.
