Wright Research, a SEBI-registered robo advisor, has launched a mutual fund transaction platform that claims to harness the power of artificial intelligence (AI). Here is a review.

What Wright Research does

Wright Research & Capital Pvt Ltd is registered with the Securities and Exchange Board of India as an Investment Advisor . The company was started by Sonam Srivastava, who has more than 10 years of professional experience in systematic portfolio management and quantitative trading in teams at HSBC, Edelweiss, and Qplum. She is an IIT Kanpur graduate and has a Masters in Financial Engineering from Worldquant University. On its website, Wright Research lists 17 offerings viz. 9 curated portfolios (₹3,666 - ₹68,383 minimum investment range), five MF portfolios (minimum ₹10,000 investment), and three alternative portfolios (minimum ₹2 lakh investment).

Wright Research’s primary business is investment advisory. It uses quantitative research-backed methods to curated investment portfolios for clients. There are four major services offered by Wright Research i.e. Equity Portfolio Advisory, Mutual Fund Advisory, Alternative Advisory, and Global Portfolios.

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What is the MF transaction platform?

Wright Research’s new MF transaction platform is based on data science and machine learning-driven algorithms. The platform offers a user-friendly, intuitive interface that enables investors to invest in curated mutual funds tailored to their unique risk profiles and financial goals. Automatic rebalancing occurs every six months. Management fee is 1 per cent. The subscription fee is ₹1,000 for 6 months.

The five MF portfolios offered are as follows:

1. Aggressive. This is a multi asset mutual fund portfolio suited for the investor with the aggressive risk profile. The maximum exposure to various sectors and themes is capped. Debt allocation 0 per cent - 19.99 per cent.

2. Moderative aggressive. As the name suggests, this is a multi-asset mutual fund portfolio suited for the investor with a moderately aggressive risk profile. The maximum exposure to various sectors and themes is capped. Debt allocation 20 per cent - 39.99 per cent; no credit risk debt funds.

3. Balanced. This is a multi asset mutual fund portfolio suited for the investor with the moderate risk profile. Compared to the high volatility potential of the first two baskets, this will have medium volatility. The maximum exposure to various sectors and themes is capped. Debt allocation 40 per cent - 59.99 per cent; no credit risk debt funds.

4. Moderately conservative. This is a multi-asset mutual fund portfolio suited for the investor with a moderately conservative risk profile. This will display medium volatility. Debt allocation 60 per cent - 79.99 per cent; No credit risk debt funds or sectoral equity funds.

5. Conservative. This is a multi asset mutual fund portfolio suited for the investor with a conservative risk profile. This should display low volatility. Debt allocation 80 per cent or more. No credit risk debt funds, Banking & PSU funds, or sectoral equity funds.

To subscribe, one has to go through 5 steps (KYC status, risk profiling, agreement, plans & payments, and open an investment account)

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Our take

Investment advisories make it easy for anyone to start investing and grow their wealth. This is especially true for first-time retail investors who usually don’t have much idea about investing, and usually base investment decisions on hear say. Choosing the right MF scheme is a task in itself. Sample this: there are 310+ open-ended debt schemes, over 380 equity schemes, nearly 140 hybrid schemes, and over 400 ‘other’ schemes. In this backdrop, choosing a good investment advisor has strong merit if you plan to go the ‘direct plan’ route in MF investing.

Given the management fee and subscription fee involved in MF transaction platforms, small-ticket sized investors can stay away. If your annual investment amount is in a few lakhs or more, then paying such fees is optimal.

Some of the interesting features of the Wright Research MF platform are AI-driven allocations for personalised mutual fund selection, semi-annual rebalancing for cost efficiency and optimal performance, tailor-made portfolios catering to different risk appetites and integration with RTAs and AMCs for investment process.

In terms of performance of the MF portfolios, one has to wait to see what kind of track record is built by the platform.

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