Want to start investing, but don’t have a lot of funds at your disposal? Now, you can start your systematic investment with just ₹250. On Friday, Association of Mutual Funds of India (AMFI) launched the chhota or small SIP initiative.
Mutual Fund investing has picked up steam in India in the last few years. Currently, around ₹26,000 crore is coming into the industry through SIPs alone per month.
Just as fast-moving consumer goods companies have products in small sachets, making them accessible to even the poor, the hope is that the ₹250 SIP will democratise investing and make mutual fund investments easily accessible to millions more across the country.
Navneet Munot, chairman of AMFI, pointed out that 2014 had been a watershed year, because of the Jandhan Yojana, where a billion plus people got inducted or integrated into the mainstream financial system. Now the need was to transform the country of savers to a country of investors, he felt.
“A typical Indian, whether it’s a daily wage earner, whether it’s a housewife, whether it’s a store owner, or whether any kind of person, doesn’t look at saving as income minus expenditure. They look at expenditure as income minus savings. It’s just that they are not investing that saving in the right manner, and that’s where the opportunity for us is,” said Munot, who is also the MD and CEO of HDFC Asset Management.
Launching the initiative, market regulator SEBI’s chairperson Madhabi Puri Buch said the small SIP initiative had been designed in a way that would incentivise long-term investments.
“It is very much designed to be a long-term product. And so I am sure that’s how the industry will also adopt it,” said Buch.
This industry-wide initiative of micro SIPs comes just a few days after SBI MF, the country’s largest asset manager along with SBI had launched a ₹250 SIP product Jan Nivesh.
READ MORE: Broadening wealth creation, SBI MF, SBI launch Rs 250 SIP scheme ‘JanNivesh’
AMFI doesn’t just want mutual fund investing accessible to more people. It also wants people to start investing early. To that effect, a Tarun Yojana has been launched. This investor education programme will aim to inculcate good investing habits among children.
“When we think about investor education, when we think about responsible investing, we don’t just want people to come into the market and go just speculate in that area, which results in them burning their fingers sooner or later, and then they just lose faith and trust in the market. The idea is that there should be a systematically available opportunity which is easily accessible, and then through that experience, you have the learning,” said Buch.
AMFI also launched another initiative MITRA (Mutual Fund Investment Tracing and Retrieval Assistant), which will help people easily find their inactive or lost mutual fund holdings.
