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How Mutual Fund Software Supports PMS With USD-Based Entries

  PMS data entry has always been a core part of an MFD’s back-office work. But until recently, everything had to be entered only in INR — even when clients invested in products denominated in foreign currency. Now, with USD-based PMS entries supported directly inside your  mutual fund software , managing such investments becomes far easier, cleaner, and more accurate. This small update solves a big pain point and opens the door to better reporting, better transparency, and better portfolio tracking. Let’s break down what this really means for you and your clients. Why USD-Based PMS Entry Matters? Many high-value investors today diversify across borders. Some hold PMS products, private arrangements, or alternative investments where values are recorded in USD. Earlier, you had to convert every value manually into INR just to enter it into the system. This led to: ●    Confusion during reporting ●    Exchange rate mismatches ●    Errors in calculatio...
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How can mutual fund software help MFDs keep their AUM intact?


Introduction:

Mutual fund distributors (MFDs) face the challenge of retaining assets under management (AUM) due to a significant number of investors redeeming their investments within a year.

However, the emergence of mutual fund software offering loans against mutual funds presents a solution that can help MFDs retain their AUM.

In this article, we will explore the benefits of loans against mutual funds and why MFDs should consider suggesting this option to their clients.

Benefits of Loan Against Mutual Funds:

  1. Liquidity without Selling Investments:

One of the primary advantages of loans against mutual funds is that investors can access liquidity without selling their investments.

This feature is particularly beneficial for investors who require immediate funds but do not want to disrupt their long-term investment plans.

By availing themselves of a loan against their mutual fund holdings, investors can meet their financial needs while keeping their investments intact.

  1. Lower Interest Rates:

Compared to traditional loans, loans against mutual funds often come with lower interest rates. This affordability makes them an attractive option for investors who require funds for short-term purposes, such as emergencies or planned expenses. The lower interest rates make it easier for investors to repay the loan without incurring excessive financial burdens.

  1. No Impact on Credit Score:

When investors avail themselves of loans against mutual funds, it does not impact their credit score. This is because the loan is secured against the mutual fund units, and the investor's creditworthiness is not a determining factor. This feature is advantageous for investors who may have a lower credit score or limited credit history, as they can still access funds without worrying about their creditworthiness.

Why MFDs Should Suggest Loans Against Mutual Funds:

  1. Retaining AUM:

By suggesting loans against mutual funds, MFDs can help their clients meet their immediate financial needs without redeeming their investments. This approach allows MFDs to retain the AUM and continue earning management fees on those assets. It also helps maintain a long-term relationship with clients, as they appreciate the flexibility and convenience offered by this option.

  1. Enhanced Client Satisfaction:

Offering loans against mutual funds demonstrates that MFDs are proactive in providing comprehensive financial solutions to their clients. By suggesting this option, MFDs can address their clients' liquidity requirements while ensuring their investments remain intact. This approach enhances client satisfaction and strengthens the trust and loyalty between MFDs and their clients.

  1. Diversification of Services:

By incorporating loans against mutual funds into their service offerings, MFDs can diversify their range of services. This diversification allows MFDs to cater to a broader client base and attract new investors who value the flexibility and convenience of accessing funds without selling their investments. It also positions MFDs as comprehensive financial advisors, capable of addressing various financial needs.

Conclusion:

Fund management software offering loans against mutual funds presents a valuable opportunity for MFDs to retain their AUM and enhance client satisfaction. By suggesting this option to their clients, MFDs can provide liquidity without selling investments, offer lower interest rates, and maintain a long-term relationship with their clients. Furthermore, incorporating loans against mutual funds into their service offerings allows MFDs to diversify their services and attract new investors. Overall, embracing this innovative approach can help MFDs navigate the challenge of investors redeeming their investments within a year while providing a win-win solution for both MFDs and their clients.

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