A Guide To Investing In Mutual Funds Via Zerodha

Investing in mutual funds through Zerodha is a simple process. First, go to the mutual fund platform on the Zerodha website. Then, search for a fund, analyse its historical performance, and click 'buy' for a lump sum or one-time investment, or SIP (systematic investment plan) if you want to invest small amounts at fixed intervals automatically. You can use your trading (Kite) login ID and password to log in and buy any mutual fund. It is important to note that the NAV (Net Asset Value) price of mutual funds changes only once at the end of each trading day, unlike stocks where the price changes constantly. Similar to stock investments, mutual fund investment on Zerodha is also free.

How to buy mutual funds on Zerodha

To buy mutual funds on Zerodha, follow these steps:

Step 1: Go to the Zerodha mutual fund platform, coin.zerodha.com. You can also access this through the Zerodha Kite app or portal.

Step 2: Search for the fund you want to invest in.

Step 3: Analyse the fund's historical performance.

Step 4: Click 'Buy' for a lump sum or one-time investment, or click 'SIP' (systematic investment plan) if you want to invest small amounts at fixed intervals.

Step 5: Log in using your trading (Kite) login ID and password.

Step 6: Enter the value or amount in rupees.

It is important to note that, unlike stocks, the Net Asset Value (NAV) price of mutual funds changes only once at the end of each trading day. Orders placed to buy or redeem a fund are typically executed based on the next trading day's NAV price.

How to set up a SIP on Zerodha

To set up a SIP on Zerodha, you will need to follow these steps:

• Log in to your Zerodha account using your trading (Kite) login ID and password.
• From the dashboard, click on "Mutual Funds".
• Select the fund you wish to invest in and click on "SIP".
• Select a Mandate or choose "None" if you prefer to pay using the payment gateway.
• Enter the initial investment amount and instalment amount.
• Select the frequency of your SIP (Weekly, 15-days, Monthly, or Quarterly). You can also choose specific days if you opt for a weekly SIP.
• Click on "Create SIP".
• Click on "Confirm" and complete the payment.

Please note that to ensure that a Systematic Investment Plan (SIP) starts within the current month, it must be set up at least 2 days prior to the preferred execution date. For example, if you want the SIP to execute on the 5th of each month, you need to set it up on or before the 3rd of the current month. If the SIP is set up on the 4th with an execution date of the 5th, it will start from the next month.

How to redeem mutual funds on Zerodha

To redeem mutual fund investments on the Zerodha Coin web platform, follow these steps:

• Click on the fund from the Holdings section.
• Enter the mutual fund units to be redeemed and click on Redeem.
• Click on Confirm. Non-DDPI/POA clients will have to authorise the units at CDSL to complete the redemption.

The time taken for the amount to be credited to the bank account after redeeming a mutual fund varies across mutual funds. To view the redemption time on Coin web, follow these steps:

• From the drop-down menu, click on Mutual Funds.
• Click on the fund and then on Redeem.
• The redemption time will be displayed on the order window.

To redeem mutual funds on the Coin app, follow these steps:

• Tap on the mutual fund and then on the context menu button.
• Enter the number of units to be redeemed or select "Redeem all units" to redeem all units and then tap on Redeem.
• Tap on Redeem again. Non-DDPI/POA clients will have to authorise the units at CDSL to complete the redemption.

Redemption orders once placed cannot be cancelled.

How to compare mutual funds on Zerodha

To compare mutual funds on Zerodha, follow these steps:

• Go to the mutual fund platform on Zerodha by visiting mf.zerodha.com or coin.zerodha.com.
• Search for any fund you are interested in.
• Analyse the historical performance of the fund. You can also view the sectors and companies that the fund house invests in.
• Compare the historical performance, sectors, and companies of different mutual funds to make an informed decision.
• Click on 'Buy' for a lump sum or one-time investment, or SIP (systematic investment plan) if you intend to invest small amounts at fixed intervals automatically.
• Log in using your trading (Kite) login ID and password.
• Remember that the NAV (Net Asset Value) price of mutual funds changes only once at the end of each trading day, unlike stocks where the price varies constantly.

How to analyse historical performance of mutual funds on Zerodha

To analyse the historical performance of mutual funds on Zerodha, you can use the portfolio analytics feature on the Console dashboard. This feature allows you to view your portfolio concentration across various assets, sectors, market caps, and stocks. You can also use the filter option to drill down further and gain insights into your direct stocks portfolio.

Additionally, you can refer to the fact sheet of a mutual fund to gather basic information such as the fund's inception date, fund manager, investment objective, and investment style. This information can help you understand the fund's ability to manage risk and generate returns.

Furthermore, you can analyse the rolling returns of a mutual fund over 3-year, 5-year, and 10-year periods. This will give you an idea of the fund's performance over time and how it compares to its benchmark. You can also look at the risk-reward matrix published by Morningstar to evaluate the fund's risk versus the category and its return versus the category.

By using these tools and analysing the historical performance of mutual funds on Zerodha, you can make informed decisions about your investments and build a well-diversified portfolio.

Frequently asked questions