Is it a good idea to invest in the subscription-based model portfolio rather than investing in a mutual fund?

The concept of a Mutual Fund & Subscription-based model portfolio is pretty different. This concept has been popularised by Smallcase.

Smallcase: Subscription-based Portfolio for Investors

Also, smallcase has the support multiple brokerages

Smallcase: Associated Brokers – 1
Smallcase: Associated Brokers – 2

Considering the popularity of the product, let us look into the pros & cons of small case & mutual funds

Small Case Pros:

  1. No Recurring Expense Ratio or Exit Load (Only One-Time Fee)
  2. Different Themes for Investment – Digital, Dividend, All-Weather, Small Beta, etc.
  3. Direct Equity Exposure
  4. Returns can outweigh the investment
  5. Fixed Fee inline with Direct Equity Buying/Selling

Small Case Cons:

  1. Not All Smallcases are made by experts
  2. Direct Equity Exposure (capital depreciation)

Mutual Fund Pros:

  1. Managed by Professional Fund Manager
  2. Indirect Exposure to Equity (through units allotted)
  3. Risk is distributed across the portfolio and subscribers
  4. Possible to invest in International Markets through the Fund
  5. Proven Track Record

Mutual Fund Cons:

  1. Expense Ratio, Exit Load(Possible)
  2. Portfolio Re-Balancing is not often to check correction/price volatility
Mutual Fund: Tried & Tested Product

Hope this helps

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Happy Investing!!


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