Paytm Money app review: Get insights into mutual fund portfolios

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Those who directly invest in mutual funds without the help of intermediaries can save on commission cost. Needless to say, this could have a significant impact on the rate of return from the mutual fund investment in the long run.

There are quite a few platforms that enable you to invest directly in mutual funds at the comfort of your home — such as MF Utilities, myCAMS, Paytm Money, Groww, FundsIndia, Coin (by Zerodha) and Fisdom.

Here we review the Paytm Money app as a platform to invest in mutual funds directly. The app also allows users to invest/trade on the stock market.

Features

Paytm Money’s on-boarding process is easy with a quick KYC (know-your-customer) system. Note that you have to complete the KYC verification even if you are KYC-compliant customer of other Paytm platforms such as Paytm Wallet or Paytm Payments Bank. The required documents for KYC are PAN card, address proof (passport, driving licence, voter ID or Aadhaar card) and IPV (in-person verification) via a video-recording.

Once the KYC is done, you can start investing by selecting the mutual fund schemes based on various factors such as the fund category, past returns, ratings for the scheme and the fund manager.

For better understanding, the schemes have been categorised into tax-saver funds, funds with best returns, ‘start with ₹100’(miniumum investment limit of ₹100), top-rated funds, new fund offerings, etc.

If you are already a mutual fund investor, the platform facilitates you to switch from regular MFs to direct funds. Also, it provides an option to import details of MF investments made through other platforms as well, which will help you navigate and track all your MF fund investments in one place.

Basic details on return on investment, tax implications — number of units that attract short/long-term taxes — and entry and exit loads of each scheme are also made available on the platform.

What we like

Unlike most other mutual fund aggregators that provide ratings for a particular MF scheme from one source, Paytm Money provides ratings from three agencies — CRISIL, Morningstar and Value Research — making it more convenient for the users to compare various schemes and form a decision.

One can also assess a fund manager’s performance in-depth as the app provides details such as introduction, number of schemes he/she manages and the performance of such funds (in terms of returns).

Users can identify the risk of a scheme — low, moderately low, moderate, moderately high or high risk. You can also take a risk assessment test by answering a few questions and categorise yourself as a moderate, balanced, growth or aggressive investor. The app maps this to the risk profile of the mutual fund schemes and recommends a scheme that matches your risk profile.

The other feature of the app that stands out is ‘portfolio insights’. This feature provides insights on sectoral allocation as well as instruments (companies in case of equity schemes) based on the latest factsheet released by the fund houses. This gives a decent picture of a scheme’s portfolio.

The app’s ‘portfolio overlap’ option points to how much of a scheme (you are planning to invest in ) overlaps with the portfolio of your existing schemes. This feature helps an investor make a wise decision to avoid concentration risk and diversify the portfolio.

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What could be better?

While presenting the rate of returns earned on investments, a comparison with the respective benchmark or other funds in the category would aid investors in the decision-making.

Also, exhibiting risk metrics of a scheme, such as Sortino and Sharpe ratio, in addition to the risko-meter, will help investors understand the risks better.

Further, most Paytm Money app users express their disappointment over the difficulty in reaching the customer care, and complain that the grievance mechanism of the Paytm Money platform is poor. So be aware of the alternative options to resolve your issues — either with mutual fund houses or registration agencies.

Most of the fintech apps that help in direct investments io mutual funds lack in-depth research and guidance and, hence, are recommended for only those who can do research on their own or have good knowledge about MFs.