Nifty Bees vs mutual funds: Radhika Gupta of Edelweiss AMC weighs in on debate

Aditya Trivedi, an option trader, has sparked off a debate on Twitter in a thread where he said mutual funds aren't exactly creating wealth and one is better off investing in an instrument that tracks Nifty. 

"You have to pay fixed fees of 2-4% of your capital in mutual fund and it automatically gets deducted from your capital. You have to pay these fees regardless of whether you make a profit or loss which makes it the worst ever investment possible.

"2-4% fees might seem small in the beginning but on a larger capital it does make a significant difference. And why do you want to even pay 4% a year just to buy hdfcbank, reliance,tcs, infy etc," Trivedi tweeted on Sunday.

You can directly buy the largecap stocks or even opt for Niftybees which has far lower fees, he further tweeted. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.

Nifty Bees is an exchange traded fund that mimics the broad-based Nifty 50 index.

Radhika Gupta, MD and CEO of Edelweiss AMC, weighed on this debate on Twitter. She said no financial product gets dissected like mutual funds because they choose to be transparent.

"There is perhaps no financial product that is dissected like MF, partly because of our growth and partly because we choose to be transparent. Yet, there is no financial product that has done a better job creating wealth for the common Indian. We rise and continue to rise," tweeted Gupta. 

Many others responded to Trivedi's viral thread saying they know people personally who became wealthy by being long-term investors in mutual funds. 

"This kid Aditya Trivedi is misleading his followers & innocent investors about mutual funds by calling it a scam just for selling his creep webinar & course," said another Twitter user. 

The net inflow in equity mutual funds plunged 76% to Rs 2,258 crore in November over the preceding month amid a sharp up move in the stock market that made investors wary of higher valuation.

This also marks the 21st straight month of inflows into equity schemes.

Overall, the mutual fund industry registered net inflows of Rs 13,263 crore in November, slightly lower from Rs 14,045 crore seen in the previous month, data released by the Association of Mutual Funds in India (Amfi) showed on Friday.

Apart from equity, debt-oriented mutual fund schemes witnessed a net infusion of Rs 3,668 crore during the period under review after withdrawing Rs 2,818 crore in the preceding month.