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While reading disclosure material published by mutual fund houses, I came across a discussion of the Mutual Fund Selection Service by NSE and the StAR MF service by BSE. To be precise, it was pg 50 of SCHEME INFORMATION DOCUMENT - HDFC Overnight Fund - dated 29th May 2020

The section starts with this paragraph

A Unitholder may purchase/ redeem units of the Scheme through the Stock Exchange infrastructure. Please refer to the website of the Fund for the eligible Scheme(s) available for purchase/redemption through infrastructure of various stock exchanges.

The entire section is a bit too long to quote, but the upshot seems to be that one can buy and sell mutual funds through the stock exchange using a broker.

I was wondering what the pros and cons were of doing so, as opposed to buying and selling directly from the mutual fund website.

Buying and selling directly through the sites seems simplest, and does not require an intermediary. And if there is a problem, presumably communicating directly with the Mutual Fund house would be the best way to get it resolved. However, in my very limited experience, the mutual fund web sites are not very good, and not very reliable. In my short use of them, I have already encountered a number of issues, mostly minor. And I'm also not happy about their security.

n the other hand, it sounds like one cannot buy and sell mutual fund units directly on the exchange as a retail investor, and presumably the brokers will not do it for nothing. Though there must be some advantages to this approach, otherwise this alternative would not exist.

So I'm asking people who use either or both MFSS or StAR MF, for their opinion. If you use MFSS or StAR MF as opposed to transacting with the MF sites directly, why do you, and what are the pros and cons? I would also like to know the cost of transacting under these schemes.

I've been looking at documents like https://static.nseindia.com//s3fs-public/inline-files/mfss_faq_investor_1.pdf, but they don't answer the questions I want answered.

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It's an additional option to buy mutual funds. If you are already trading in stocks, advantage is you can use single login to access both and see consolidated portfolio.

Other options are via individual websites or via consolidated websites of AMFI Association of mutual funds India.

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  • Thank you for the reply. I was hoping for a more detailed pros/cons discussion. Having a single login and being able to see the consolidated portfolio don't seem like very compelling advantages in themselves, and there are certainly some tradeoffs. E.g. one perhaps cannot buy/sell as conveniently. And more layers of indirection can cause problems. MF Utilities is also another option, I think. – Faheem Mitha Jul 24 at 7:23

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