How to Invest in Mutual Funds with Kuvera?

Kuvera makes investing easier and accessible for everyone. It takes only minutes to sign up and explore the best-performing mutual funds across different categories. To invest from anywhere, download the Kuvera app on your smartphone and follow these below mentioned steps to invest in mutual funds through Kuvera:

Step 1: Sign up on Kuvera's website or mobile application using your email ID and password.

Step 2: Go to the Invest section and select the mutual fund category you want to explore.

Step 3: You can type in the name of the mutual fund scheme or sort the results.

Step 4: Click on the fund's name to view its details (NAV, expense ratio, AUM, etc.)

Step 5: Choose whether to invest via SIPs or lump sum and enter the investment amount.

Step 6: Confirm your order and complete the payment.

Why Choose Kuvera over Other Investment Platforms?

At Kuvera, we help you make informed investment decisions. Here, you won't feel any sense of FOMO, or get “hot tips” or schemes to double your money in 21 days. Kuvera professionally analyses your risk profile based on the inputs provided by you, and recommends the optimal investment options to help you in reaching your financial goals. Kuvera is your safe space for mutual fund investment.

Use the Kuvera platform to create long-term wealth without paying any fee. Here are some more reasons to choose our platform for all your investment needs:

• Direct plans only: Kuvera only offers direct plans, so you never have to pay any commission and the mutual funds plans in which you will be investing will have a significantly lower expense ratio. This lets you save a significantly higher amount in the long run, in comparison to regular mutual fund schemes. There's no catch — all features on our platform are completely free and accessible for everyone. Explore over 5000 direct mutual funds from all AMCs of India like SBI Mutual Fund, ICICI Prudential MF, HDFC MF, Birla Sun Life MF, Nippon India MF, Axis MF, Mirae Asset MF, Tata MF, L&T MF and more.

• Manage all your investments: Import your external mutual fund investments on Kuvera with our seamless import feature. You can import your stock portfolio from your existing broking platform, or upload the Consolidated Account Statement on Kuvera in order to track your stock investment and mutual fund investment through one single app. 

• Switch from Regular Plans to Direct Plans: Changing your mutual fund from commission loaded Regular Mutual Funds to Direct plans was a cumbersome process. On Kuvera, we help you smartly and seamlessly switch to direct plans.  Kuvera’s TradeSmart feature allows this with least exit load tax implication. We show your units that are outside the STCG window, which means 1 year for equity funds. When you are placing your order, you will also see the  applicable LTCG and exit load so you can make better decisions.

• Expert financial team: Team Kuvera team consists of ex-money managers and technologists. With years of experience, the team at Kuvera knows how to simplify your investment journey. Kuvera also has a dedicated support team to assist you and answer your queries 24x7.  

• 100% unbiased: Whenever you search for the top mutual funds in India on Kuvera, you get an accurate and fair picture of the mutual fund performance. We do not receive any commissions from fund houses, nor do we charge any fees based purely on statistics and data. We represent the most relevant data in the form of simple to understand graphs and charts that will not overwhelm you with data.

• Add your financial goals: You can use goal-based strategy through our goal-planning feature and invest in a disciplined and structured manner. Converting your desire into a financial goal helps you stay committed to it.  Whether you want to own a new car or a new home or fund your child's education, you can use our detailed investment recommendation to realise these goals.  

• Manage investments of the family: Sign up to manage your own and family's investments in one place. You can manage multiple accounts under the same login ID. Use Kuvera to track all your mutual fund investments in real-time.

• Bank-level security: At Kuvera, we use best-in-class tools and security protocols to ensure your money is 100% safe. All your personal and financial data is kept secured through 128-bit encryption in order to secure your data with the highest level of privacy protection.

Read on to understand mutual funds better and learn how you can make the right investments.

What Is a Mutual Fund?

A mutual fund is an investment vehicle that mobilises funds from different investors to achieve a common investment objective. Funds are raised by selling the fund's units, which represent contributions to the mutual fund corpus. The fund invests this money into various assets such as stocks, bonds, money market instruments, real estate, gold, etc. 

Fund managers professionally manage mutual funds, and invest the pooled money according to the scheme's objectives to make financial gains. They distribute returns from the mutual funds proportionately among investors after deducting the applicable fees also called the expense ratio. 

The most significant advantage of mutual funds is that they allow retail investors access to a diversified portfolio of financial securities (stocks, bonds, and more). This level of diversification would be challenging for most investors as they would need a substantial amount of capital. Other benefits include their professional money management and strict regulation by SEBI. 

What Are the Different Types of Mutual Funds?

There are many types of mutual fund schemes in India, each designed to suit different investment goals. Based on their structure, there are open-ended and close-ended funds. Depending on the fund manager's role, mutual funds can also be active or passive.

The following is a broad classification of mutual funds based on the underlying asset class and investment objectives.

1. Equity funds: These funds invest most of their assets in stocks and related instruments. Returns from equity funds largely depend on the current stock market climate. Equity funds are ideal for investors looking for high returns and have a higher risk tolerance.

2. Debt funds: Debt funds invest primarily in fixed-income instruments like government securities, treasury bills, corporate bonds, debentures, certificates of deposits, etc. They aim to provide regular and stable returns while protecting your capital. 

3. Hybrid funds: Hybrid funds invest in stocks and debt to offer balanced returns and risks. Their asset allocation will differ based on their mix of equity and debt.

4. Solution-oriented funds: These mutual fund schemes aim to build wealth investors for achieving their long-term goals like children’s education or retirement plans. They carry a lock-in period of at least 5 years or the retirement age whichever is earlier. 

5. Index Funds: Index mutual funds replicate the index which they are following, a mutual fund following Nifty 50 will invest in those 50 stocks, which comprise the Nifty 50. Index funds due to their historic performance are one of the most popular investment options amongst investors.

6. Other funds include ETFs (Exchange Traded Funds), ELSS mutual funds, and FoFs (fund of funds), etc.

Benefits of Investing in Mutual Funds

Here’s why so many investors choose to invest in mutual funds:

• Professional money management

  Most investors neither have the time nor the expertise to pick individual stocks and bonds. Professional fund managers run mutual funds and make investment decisions pertaining to the mutual fund. They have the experience, resources, and time to monitor your investments continuously and rebalance your portfolio if needed.

• Portfolio diversification

  As mutual funds invest in multiple asset classes and sectors, they offer the benefit of diversification. This involves investing in a mixture of assets to mitigate your investment risks. When some securities in your portfolio perform poorly, other financial instruments make up for it. 

•  Highly liquid investment

  Another reason to invest in mutual funds is superior liquidity against other investments. You can quickly liquidate your investments by placing a redemption request on any business day. The fund will credit this amount to your bank account within 1-3 business days. Some fund houses offer an instant redemption facility. Most mutual funds have no lock-in period. However, ELSS mutual funds are an important exception to this rule.

•  Affordability

  Mutual funds charge nominal fees due to their massive economies of scale. It is an affordable investment option as you can start investing with only Rs. 100 per month via SIPs. 

• Strictly regulated

  All mutual fund schemes come under the regulations of India's market regulator SEBI (Securities and Exchange Board of India). Every fund house must follow SEBI's rules and regulations that ensure investor protection and transparency.

Things to check before investing in mutual funds

Before you invest in mutual funds, here are some of the factors you will need to check:

• Risk levels: Different categories of mutual fund schemes carry different risks depending on their asset allocation and investment objective. You will want to check if you are comfortable with the risk levels and investment objective of a fund before investing.

• Expense ratio: The expense ratio is an annual charge imposed by AMCs to cover a mutual fund scheme's managerial and operating costs. It is essential to check the fund's expense ratio as a high fee will considerably reduce your returns.

• Your financial goals: You will want to invest in a mutual fund best suited for your investment goal, whether to fund your children's education or build a retirement corpus. Even if you do not have a clear goal, you can decide based on factors like investment time horizon and expected returns.  

• Fund’s past performance: Check the fund's annualized returns for the past 3-5 years to get an idea of how well it has been managed. You will want to compare its performance against its benchmark and peers for the last few years. Although please note that past performance does not guarantee future returns.

• Fund manager’s track record: As the fund manager's role is crucial in determining a mutual fund's performance, you need to check their qualifications, experience, and track record. Check if their managed funds have delivered consistent returns or outperformed their benchmark index. 

Final Word

Mutual funds are a popular investment option in India due to their various benefits like portfolio diversification and professional money management. There are many choices of mutual fund schemes that you can choose from. Consider factors like risk tolerance and financial goals to pick the right mutual fund for your portfolio and do not blindly invest based on the advice you receive from your friends or family members. 

With platforms like Kuvera, finding the top-performing mutual funds has never been easier. Simply sign up on Kuvera to start your investment journey. 

Frequently Asked Questions

1. What is the meaning of the NAV of a mutual fund?

   Net Asset Value or NAV is the price of a unit of a mutual fund scheme at which an investor can buy or redeem their mutual fund investments.  The combined NAV of all the units of a particular mutual fund scheme represents the combined market value of all assets held by a fund on a particular day plus the accrued income minus its expenses and liabilities.

2. How is a mutual fund set up in India?

   In India, all mutual funds are set up as trusts, with sponsors, trustees, custodians, and an AMC (Asset Management Company). The sponsor is the trust's founder, while the trustees hold the fund's assets. The custodian is registered with SEBI to hold its securities. Meanwhile, the AMC employs fund managers to manage the pooled funds.   

3. What is the AUM of a mutual fund scheme?

   Assets under Management (AUM) refer to the total assets managed and operated by a mutual fund. A large AUM generally means that many investors have invested a large corpus in the fund. 

4. What is the difference between direct plans and regular plans?

   Most mutual fund schemes have two plans: regular and direct. Regular plans are those that you can purchase via agents or brokers. Direct plans are offered by the fund house directly through their website or through direct mutual fund platforms like Kuvera. Direct plans have a lower expense ratio than regular plans as the AMC does not have to pay commission to any third-party agent in the case of a direct mutual fund plan. Regular mutual funds have a higher expense ratio as commission/brokerage fees of the brokers is built-in the regular mutual fund scheme through a higher expense ratio.

5. Why would you want to invest in mutual funds via SIPs?

   Systematic Investment Plans (SIPs) allow you to periodically invest small amounts in a mutual fund scheme (weekly, monthly, quarterly, or yearly). It makes investing easier, regular, and affordable. Moreover, you do not need to time the market when investing via SIPs; your purchase costs average out over time.