The COVID-19 pandemic has come across as a major disruptor for our daily lives, business, economies and personal finances alike. India is facing a scenario where it has been able to control the widespread impact of this pandemic, although a lot still needs to be done.
A ray of hope exists in the fact that various vaccine trials have entered really advanced stages and the release of an official vaccine will naturally be a major stimulator for business and economic recovery alike.
Till then, carefully managing your finances and investments is the best way to deal with the crisis along with maintaining physical and social distancing and following other safety and hygiene protocols.
The economic impact of COVID-19 is expected to be quite severe indeed. The IMF (International Monetary Fund) has projected growth of only 1.9% for the Indian economy this year although a sharp recovery at 7.4% is forecasted for 2021 as well.
In this context, CII (Confederation of Indian Industry) has asked for a specific stimulus package equivalent to 3% of the Indian GDP from the Central Government which has also rolled out various relief measures in recent times. In such a scenario, you may naturally be confused about investment ideas during coronavirus and where to safely deploy your hard earned money.
What else should you know?
What you should keep in mind is that you should not restrict investments at this juncture. Do your research on where to invest during a market correction and make sure that you maintain proper liquidity of investments without overemphasizing on cash according to experts.
Post a major correction that has been witnessed in the market over the last few months, particularly in equity, you may have an opportunity to make a tremendous value purchase with decent security levels and good valuations alike.
You can take a strategic risk and allocate your hard earned funds to equity as a key asset class provided you have ample risk tolerance along with holding money in gold and debt under the current scenario as per some experts.
Assessing the coronavirus impact on mutual funds is tough without a doubt. Many people are eager to invest in mutual funds at the moment although they remain confused about implementing their plans during the ongoing COVID-19 pandemic.
It is really difficult to venture out of the house to implement any major activity at the moment although you can always deploy investments online in mutual funds. If you are a new mutual fund investor, you will have to get your KYC compliance or KYC done through an intermediary with SEBI (Securities and Exchange Board of India) registration.
These include online platforms, distributors and mutual fund houses through KYC registration agencies or KRAs. This is a one-time procedure made compulsory by SEBI for eliminating fraud. It also helps in verification of the identity of an individual as an investor in mutual funds.
Ways to invest in mutual funds
There are several ways of deploying investments in mutual funds. Be it any sector, whether you are investing in pharma sector like Nippon India Pharma Fund or any other sector, you will need to keep the following things in mind:
Mutual Fund Houses– AMCs or asset management companies are great platforms for investing in mutual funds. This applies for investments made offline, online and via mobile apps. Investors can physically go to offices of AMCs and commence investing in case KYC has been completed.
Investments may also be done through the website of the fund house while some mutual fund firms have apps for investments as well. If you choose to make investments via these fund houses, you will be able to invest in schemes offered by them only. Yet, you will not have to fork out any brokerage or agent fees/charges at the same time.
● Demat Account- This is another direct investment method that you can follow. With the help of a demat account, investors can directly deploy investments in various securities including stocks, mutual funds, bonds, government securities and exchange traded funds from a single destination. With the help of a demat account, investors have to shell out an annual brokerage charge along with expense ratio.
● Fintech Portals- Online mutual fund aggregators and third party platforms are similar to RTAs where investors are given the option of making investments and executing all transactions via their sites. There are various popularly used investment platforms like Groww which simplify the whole investment process for investors.
● Stock Exchange- SEBI (Securities and Exchange Board of India) has now allowed investors to directly invest in mutual funds via recognized stock exchanges as well. This will enable investors to avoid intermediaries or brokerages although you will have to finish online registration (one-time) with the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
● RTAs (Registrar and Transfer Agents)- SEBI-registered RTAs can be visited for making investments in mutual funds. However, you will have to submit your bank draft or cheque at the branch office post completion of the application form. You can choose schemes offered by multiple fund houses and mutual fund firms instead of picking those offered by one fund house.
● MFU- Mutual Fund Utilities means shared platforms owned by various AMCs for mutual fund transactions and these are usually promoted by the industry itself. You can venture into these platforms for making offline/online investments.
● ISC- Investor Service Centres are physical branches and offices of mutual funds or RTAs in various locations country-wide. You can conduct all major transactions here including investments and redemption.
In times of COVID-19 and economic uncertainty, consolidate and revive your investments in a bid to prepare for the future. Make your mutual fund investments wisely and check out the above-mentioned avenues to execute the same.
Author bio: Bryony Jones is a blogger and passionate about content writing. She has been blogging about for more than 7 years now with variety of topics.