Mutual Fund Investment / New trend of Mutual Fund investment, investors are using this method

In the last 18 months, the trend of investing in direct plans of mutual funds has changed. According to a report by Business Standards, now the share of investors investing through investment advisors and PMS providers has increased rapidly. At the same time, the growth of DIY investors has slowed down. Market volatility is a major reason for this.

Mutual Fund Investment: In the last 18 months, a big change has been seen among those investing in direct plans of mutual funds. According to a recent report by Business Standards, the share of those investing in direct plans through investment advisors and portfolio management service (PMS) providers is now increasing rapidly. In contrast, the growth rate of DIY (Do It Yourself) investors who invest without any advice has decreased slightly. This change is happening due to market volatility and changing investor behavior.

Two ways of investing in direct plans

Investors investing in direct plans of mutual funds are mainly of two types:

DIY investors: These are investors who choose their funds themselves without the help of any advisor. Their main advantage is that they do not have to pay any additional fees.

Investors with advisor or PMS: These investors take the help of advisors or portfolio management service providers. They charge for their services, but in return provide expert advice and guidance to investors.

Information from the data

According to a recent report by Business Standards, the assets (AUM) of those investing through advisors and PMS providers have increased significantly by 64-65% from January 2024 till now. On the other hand, the assets of DIY investors have increased by 47%. Overall, the direct plans of mutual funds have increased by 41%. These figures make it clear that investors are now preferring to invest with the advice of experts than investing independently.

Why is the demand for advisors increasing?

The recent volatility and low returns in the market have made both new and experienced investors feel the need for expert guidance. Investment advisors and PMS providers help investors understand the complex conditions of the market. They help to avoid wrong investment decisions taken in panic.

Cause and effect

Market uncertainty: Due to volatility and uncertainty in the stock market, investors are turning to advisors to avoid risk.
Need for expert advice: Advisors and PMS providers give personalised advice to investors based on their financial goals and risk tolerance.
Better decision making: With the help of advisors, investors stay patient during market volatility and stick to a long-term investment strategy.