Exploring Untapped Potential of Mutual Funds

Mumbai, January 31, 2017: The Mutual Fund industry has seen unprecedented growth in the past 3 years. In November 2016, total assets managed by mutual funds touched a record high of ?16.5 lakh crores rupees, a year on year growth of 27%. Total number of folios in India also reached a record number of 4.7 crore. However, mutual funds still suffer extremely low penetration in India. A 7% share of Assets under Management (AUM) of Mutual Funds to GDP is significantly lower than some other emerging economies like Brazil (42%) and South Africa (33%). Studies show that the main reason for low penetration is low level of financial literacy among Indian consumers, which leads the average investor to view options like mutual funds with suspicion and caution. This insecurity is also a consequence of the mutual funds’ proximity to the volatile stock market and vague non-performing recommendations by some distributors and agents. MoneyFront, a newly launched mutual fund investment portal, aims to facilitate the industry to broaden and deepen its reach amongst retail investors through a confluence of simplified advisory and enabling technology.
 

Introducing Direct plans of mutual funds
 

MoneyFront aims to highlight the true potential of mutual funds to investors by firstly adopting the no-conflict option of direct plan of mutual funds. Direct plans are an alternative to the regular plans of mutual funds where you can skip the distributors and agents and invest directly with the Fund House.

A direct consequence of this is an increase in returns by up to 1.5% annually, as the commissions paid to the distributors/agent are not charged to the scheme. MoneyFront, in its endeavour to provide maximum benefits to clients offers only ‘Direct Plans’. For investors who are not well-versed about mutual funds or who need help with their asset allocation, MoneyFront also offers investment advisory that provides model portfolios and scheme recommendations tailor-made to the investor’s financial goals and risk tolerance levels. Over and above that, the investors have access to a vast library of news, views, developments, and statistics related to mutual fund schemes and everything else that impacts them. 

Leveraging technology for ease of investment
 

Anil Bang - CoFounder - MoneyFront

Secondly, by leveraging the power of technology MoneyFront offers a simple and encyclopaedic portal dedicated to investment in direct plans of mutual funds. MoneyFront offers a 100% paperless process through which investors can invest in new schemes or switch their current investments (regular plans) to direct plans ensuring that they get maximum benefits from their investments. MoneyFront also provides intelligent calculators to empower the investor with expected savings, past performance of schemes, wealth calculators and retirement planning. With host of data and analytics at their disposal, investors can make a well-informed decision on the right schemes to invest.
 

Puneet Mehta - CoFounder - MoneyFront

Puneet Mehta, one of MoneyFront’s three Cofounders says that, “According to a survey conducted by a leading business newspaper almost 76% of the people interested in mutual funds are between the age bracket of 20 to 40. Out of these investors only 31% invest in mutual funds for the long term. It is quite obvious that the information regarding mutual fund reaching them is not very adequate or in some cases distorted. MoneyFront provides all possible avenues of information on one platform. It also provides an automated advisory which recommends schemes that are unbiased and only benefit the investor himself.”
 

Mohit Gang - CEO and CoFounder - MoneyFront

Mohit Gang, MoneyFront’s CEO and CoFounder quotes, “MoneyFront is inspired by three critical drivers viz. providing investors a paperless solution in an industry burdened with reams of paperwork, helping an investor make right investment choices after objectively defining his/her risk appetite and last but the most important, to advice customers without any conflict. To tackle this last point, Moneyfront chose to become a registered Investment advisor and offer only ‘Direct Plans’. Thus, completely eliminating commissions and doing away with one of the key reasons of conflict. Moneyfront recommendations are only based on the best interests of the investor and not by the commission attached to those schemes. Over and above this, technology interface of MoneyFront makes it extremely easy to navigate between schemes, compare options, and choose the right ones.”
 

Idea of MoneyFront came from three childhood friends all hailing from different companies, yet conjoined with their passion for Investments - Mohit Gang (ex-SVP, HSBC Bank), Anil Bang (Analyst, Marshall Wace) and Puneet Mehta (ex-Director, BOA-Merrill). All experts in their domains, they setup MoneyFront with a single-minded objective to enable investors to get more returns from their investments. Within merely a month of inception MoneyFront.in has already achieved critical acclaim and counting over 500 signups. 
 

MoneyFront provides the retail investors a conflict free and lucrative long term solution increasing the relevancy of mutual funds as viable investment options. MoneyFront’s automated advisory services, 100% paperless investment process and comprehensive compendium of investment knowledge might just catalyse a revolution in mutual fund industry by providing retail investors an option to invest in Direct plans and enable them to get more from their mutual fund investments than ever before.