Mutual Fund: A new trend is seen in Mutual Fund investment, investors are using this method..

In the last 18 months, a big change has been seen among the people investing in the direct plans of mutual funds. According to the report of Business Standards, now the share of those investing in direct plans through investment advisors and PMS providers is increasing rapidly. Whereas the growth of DIY (Do It Yourself) investors who invest without any advice has reduced a bit. This change is happening due to the investment method and market volatility.

Two ways of investing in direct plans

Two types of investors invest in direct mutual fund plans. First, those who choose their funds without any advice are called DIY investors. Second, those who take the help of investment advisors 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 for their services.

What do the data reveal?

According to a report by Business Standards, from January 2024 till now, 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 plans of mutual funds have registered a growth of 41%. This means that now investors are adopting the path of investment with guidance as compared to investing without advice.

Why is the demand for investing with an advisor increasing?

Due to volatility and low returns in the market in recent times, both new and old investors are feeling the need for guidance. Investment advisors and PMS providers understand the market situation and give better investment advice, so that investors avoid stopping investment in panic. These may be the reasons why investors are now preferring to make better investment decisions with the help of advisors amid market uncertainties.

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