Grove responds to Nitin Kamath’s tweet: Direct mutual funds remain free for DIY investors

Groww has said that direct mutual funds will be central to its platform and open to investors, responding to confusion over its mutual fund offerings following Zerodha founder Nitin Kamath’s recent post on direct plans.

The company said direct mutual funds are the “heart of Grove” and its existing mutual fund investors will not see any changes to the plan, pricing or experience. Grove said that more than 1 crore investors have invested Rs. 1.9 lakh crore mutual fund investments, making it the largest mutual fund platform in the country.

“For every DIY investor, Groww remains what it’s always been: direct, zero-commission and free. Forever,” the company said. It added that it will continue to launch new facilities for direct mutual fund investors.

Also Read: Zerodha will hold direct mutual fund schemes for free, says Nitin Kamath

The response came after Kamath said Zerodha Sikka would continue to offer direct mutual funds for free. He said that when Zerodha started the discount broking model in India in 2010, it decided to charge the same fee irrespective of the size of the trade because the effort involved in executing the trade was the same. He said the same logic was applied to mutual funds, and Zerodha did not launch mutual funds until it could offer only direct schemes.

Kamath also said that most of the direct mutual fund platforms that started around the time Zerodha launched the coin had either disappeared, changed direction or were rethinking their choice to offer direct plans. Zerodha will continue to offer free direct mutual funds, he added.

Grove, without naming Zerodha or Kamath, said there was “confusion” and “misinformation” about its mutual fund offering. He clarified that MF Prime is not far from direct mutual funds, but an additional product for a different set of investors.

“MF Prime isn’t a shift. It’s an addition — a product completely tailored for a different group: investors who want research-backed guidance on what to buy, hold, exit and rebalance,” Grove said.

The company said many investors wanted to invest through Groww but held back because they needed help. MF Prime is for such users, he said.

“If you’re a DIY customer on Groww today, nothing changes for you. No plans, no prices, no experience,” said Groww. “Any commentary claiming that Grove has changed its approach to investing in mutual funds is false.”