Investing in mutual funds provides individuals with an accessible and diversified way to grow their wealth over time. Parag Parikh Mutual Fund, known for its prudent investment approach and customer-centric philosophy, is a popular choice among investors. In this comprehensive guide, we will walk you through the steps on how to buy Parag Parikh Mutual Fund units, exploring the key aspects of the investment process and offering insights into making informed decisions in the dynamic world of mutual fund investing.
Understanding Parag Parikh Mutual Fund
Parag Parikh Mutual Fund is a part of Parag Parikh Financial Advisory Services Limited (PPFAS), a well-established financial services company in India. The mutual fund is known for its distinctive investment philosophy, which focuses on long-term wealth creation through a blend of Indian and international investments. The flagship scheme, Parag Parikh Long Term Equity Fund (PPLTEF), has gained popularity for its global diversification and a well-balanced portfolio.
Choosing the Right Mutual Fund
Before diving into the process of buying units in a Parag Parikh Mutual Fund, it’s crucial to identify the right mutual fund scheme that aligns with your financial goals, risk tolerance, and investment horizon. Parag Parikh Mutual Fund offers a range of schemes catering to different investment objectives, including equity funds, hybrid funds, and international funds.
Parag Parikh Long Term Equity Fund (PPLTEF): This equity-oriented fund focuses on long-term capital appreciation by investing in a diversified portfolio of Indian and international equities. It follows a value-oriented investment approach.
Parag Parikh Liquid Fund: If you are seeking short-term liquidity and capital preservation, the liquid fund offered by Parag Parikh can be a suitable choice. It primarily invests in money market instruments and debt securities with shorter maturities.
Parag Parikh Conservative Hybrid Fund: For investors looking for a balanced approach with exposure to both equity and debt, this hybrid fund offers a mix of stability and growth.
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KYC Compliance
Before you can invest in any mutual fund, including Parag Parikh Mutual Fund, it is mandatory to complete the Know Your Customer (KYC) process. KYC compliance involves providing essential personal and financial information to the mutual fund registrar or the intermediaries facilitating the investment. This step is crucial for regulatory compliance and ensures that the mutual fund house has verified the investor’s identity.
Investors can complete the KYC process through registered intermediaries such as mutual fund distributors, online platforms, or by visiting the official website of Parag Parikh Mutual Fund. The submission of identity proof, address proof, and other necessary documents is required for KYC verification.
Choosing the Mode of Investment
Parag Parikh Mutual Fund offers multiple modes for investors to initiate their investments. The most common methods include:
Online Platforms: Many investors prefer the convenience of online platforms to invest in mutual funds. The official website of Parag Parikh Mutual Fund and various third-party platforms provide a user-friendly interface for investors to register, complete KYC, and invest seamlessly.
Authorized Distributors: Investors can also choose to invest through authorized distributors or financial advisors. These intermediaries assist investors in the investment process, guide them on fund selection, and provide personalized advice based on their financial goals.
Offline Mode: For those who prefer a traditional approach, investing offline through the physical submission of application forms is still an option. Investors can obtain application forms from the official website or the offices of Parag Parikh Mutual Fund and submit them along with the necessary documents.
Creating an Account
Once the KYC process is successfully completed, investors need to create an account with Parag Parikh Mutual Fund to start investing. The account creation process may vary slightly depending on the chosen mode of investment.
Online Platforms: On the official website or online platforms, investors can follow the registration process, providing necessary details such as PAN, bank account information, and contact details. After registration, investors can log in to their accounts to browse funds and initiate investments.
Authorized Distributors: When investing through authorized distributors or financial advisors, investors need to fill out the application forms provided by the intermediary. The distributor will guide them through the process, ensuring accurate and complete information.
Selecting the Mutual Fund and Investment Amount
With the account set up, investors can proceed to select the Parag Parikh Mutual Fund scheme they wish to invest in. Consider factors such as the fund’s investment objective, historical performance, risk profile, and expense ratio before making a decision. The investment amount can be chosen based on the investor’s financial capacity and investment goals.
Lump Sum Investment: Investors looking to invest a one-time amount can opt for a lump sum investment. The chosen amount is invested in the selected mutual fund scheme at the prevailing Net Asset Value (NAV).
Systematic Investment Plan (SIP): SIP is a popular investment strategy that allows investors to contribute a fixed amount regularly, typically on a monthly basis. SIPs offer the benefit of rupee cost averaging and disciplined investing over the long term.
Payment and Confirmation
After selecting the mutual fund and the investment amount, investors need to make the payment to initiate the investment. Payment can be made through various modes, including:
Net Banking: Online platforms facilitate payments through net banking, providing a secure and efficient way to transfer funds.
Cheque or Demand Draft: Investors opting for offline modes can make payments through cheques or demand drafts. The payment instrument should be drawn in favor of the specific scheme’s name.
Upon successful payment, investors receive a confirmation of their investment, which includes details such as the number of units allotted, NAV at the time of investment, and the total invested amount. This confirmation serves as a record of the investment and is essential for tracking the performance of the mutual fund.
Monitoring and Reviewing Investments
Investing in mutual funds is a dynamic process that requires periodic monitoring and review. Parag Parikh Mutual Fund provides investors with regular updates on their investments, including monthly statements and portfolio insights. Investors should actively review their investment portfolio, assess performance, and make adjustments based on changes in financial goals or market conditions.
Conclusion
Investing in Parag Parikh Mutual Fund offers individuals an opportunity to participate in a well-managed and diversified investment portfolio. By following the steps outlined in this guide, investors can navigate the process of buying mutual fund units with ease. However, it’s crucial to remember that mutual fund investments are subject to market risks, and investors should align their investment decisions with their risk tolerance and financial objectives. Seeking advice from financial experts or advisors can further enhance the decision-making process, ensuring that investors make informed choices in their journey towards wealth creation.
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