Paytm money doubles down on mutual funds; here’s how it targets first-time investors

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Updated: June 27, 2019 1:40:25 PM

Paytm will offer a portfolio of five mutual funds, which are supported by Paytm Money’s 'risk suitability assessment', and customers (investors) are recommended right 'pack' based on their individual risk profiles

Paytm Money claims to be the largest online mutual funds investment platform with over 1 million active users. (Image: Bloomberg)

Paytm Money — the mutual fund investment arm of Paytm has partnered with independent investment research firm Morningstar’s India subsidiary Morningstar Investment Adviser India to offer ‘Morningstar Investment Packs’ to its users on the Paytm Money app.

The offer brings a portfolio of five mutual funds, which are supported by Paytm Money’s ‘risk suitability assessment’, and customers (investors) are recommended right ‘pack’ based on their individual risk profiles, the company said in a statement. Hence, investors with risk appetites ranging from low and conservative to moderate, growth and aggressive are exposed to the packs, each of which has three to five Morningstar Analyst rated funds.

The users will have the option of investing through SIP or lump sum mode on the app and Morningstar will periodically review the packs selected by the user. The packs are offered to focus on “first-time investors” who need assistance in picking the right mutual funds for long-term wealth creation, Paytm said.

Paytm has been adding multiple services for customers and merchants across its platforms including Paytm — the flagship app, Paytm Money and Paytm Payments Bank. Paytm First credit card, loyalty programme Paytm First, instant bank settlement and recurring payments service for merchants etc., over the past eight-nine months. The app already has over 10 lakh installs on the Google Play store.

“One of the things where Paytm Money may have some advantage in mutual funds is the familiarity of the app with its other platforms including Paytm and its payments bank. So people are very familiar with how to use Paytm and so they are more likely to opt for their other services like mutual funds. So the overall design principle and user experience are seamless. Although this may be a soft indicator, it can give an added advantage to Paytm Money, “Arnav Gupta, an analyst focusing on finance and retail at Forrester told Financial Express Online.

The Indian mutual fund industry has grown from Rs 6.64 trillion as on 31st May, 2009 to Rs 25.94 trillion in assets under management as on 31st May, 2019 — almost 4X growth in 10 years, as per the Association of Mutual Funds in India.

Hence, Paytm’s expansion into mutual funds industry gains significance as “over the last couple of years, the Indian mutual fund industry has witnessed significant growth,” said Aditya Agarwal, MD and Country Head, Morningstar India. 

Paytm Money claims to be the largest online mutual funds investment platform with over 1 million active users. The company had launched the app for mutual funds investments in September last year expecting “the mutual fund investor base in India to increase to 50 million in the coming five 5 years and hoping Paytm Money to bring new incremental investors to the industry,” Vijay Shekhar Sharma, Founder & CEO , Paytm had said during the launch.

The company had already partnered with  MorningStar and other rating agencies such as crisil, and Value Research before the launch for easy investment decision making process by customers.

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