Online platforms offering direct plans have become a major force in the mutual fund industry. These platforms essentially allow investors to make their own fund selection although some non-mandatory advice is provided. This makes them barometers of what do-it-yourself (DIY) investors are thinking.
Mint looked at data from platforms such as Paytm Money, Kuvera and Groww to understand where DIY investors are putting their money. Readers should note that Mint does not necessarily recommend any of the funds mentioned in the article. Please refer to Mint50 for our selection.
Some of the fund choices of platform investors may also be influenced by AMC-platform deals to promote products linked to particular schemes.
According to data provided by Paytm Money for the months of May and June, Axis Bluechip Fund, Nippon India Liquid Fund, Mirae Asset Emerging Bluechip Fund, Axis Long Term Equity Fund and SBI Small Cap Fund were the top five schemes selected on the platform in that order.
Jinesh Gopani, head of equity at Axis Mutual Fund is known for a quality-driven approach even at high stock valuations. This has caused Axis MF's schemes to outperform in a narrow market driven by quality stocks. Over the past year, Axis Bluechip Fund has delivered -4.04% compared with -10.38% returns on the S&P BSE 100 as of 2 July.
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Over the past three years it has given 9.20% compared with 3.92% on the S&P BSE 100, beating the index by a wide margin. Online platforms have also done tie ups with some AMCs, which offer instant redemption on their liquid funds. This can account for the popularity of schemes such as Nippon India Liquid Fund.
Users of another platform, Kuvera, which has reported an AUM of ₹11,500 crore, showed similar trends. Kuvera releases a weekly list of most popular schemes to its entire user base. The latest version, which was released for the week ended 3 July features Axis Bluechip, UTI Nifty Index, Mirae Asset Emerging Bluechip, Axis Long Term Equity and Kotak Standard Multicap in that order.
Finally, data released by Groww, another large online platform founded in 2017, shows a similar set of schemes. Its users picked up Axis Bluechip, Kotak Low Duration, PPFAS Long Term Equity, Axis Long Term Equity Fund and Aditya Birla Sun Life Arbitrage Fund in that order from 21 June to 27 June, the latest weekly data released to Mint.
“Across the last three months, we're observing large-cap funds emerging as the investor's favorite. Even back in April when the lockdowns were a new phenomenon, large-cap funds remained a favorite of our investors," said Harsh Jain, chief operating officer (COO), Groww.
“In the debt category, liquid funds are featuring repeatedly in our topmost invested funds every week. Investors are clearly using these funds as a safer place to park money. Low duration funds are also starting to appeal to investors in recent weeks," he added.
Financial planners believe that DIY investors' behavior is driven by recent returns of mutual funds. “For example, in cases like Axis Blue-chip, the relative one- and three-year returns are extremely high and there is no doubt that recent performance is driving flows. This is not to say that these are bad funds and the performance may well be sustained. However, investors should be careful about evaluating funds on parameters other than returns also," said Amol Joshi, founder, Plan Rupee Investment Services.
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Which mutual funds are do-it-yourself investors picking up? - Livemint
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