The market regulator, the Securities and Exchange Board of India (SEBI), is working with mutual funds to reduce the minimum costs of Systematic Investment Plans (SIPs). The move is being initiated after seeing a spurt in investments in SIPs among investors.
SIPs in mutual funds have highlighted significant growth in the last few years. Systematic investments of Rs 500 are made viable, but there is no option to explore SIPs of Rs 250, which could lead to more inclusion in the market.
The markets regulator is working with the mutual funds industry to facilitate making it possible to bring that viability down to Rs 250 a month.
The Indian capital markets will receive a massive fillip via smaller-range SIPs, and this would also help the country’s financial inclusion agenda. The mutual fund industry registered its highest-ever monthly investments through SIPs at more than Rs 17,000 crore for November 2023.
The numbers were in the green despite Foreign Institutional Investors (FIIs) selling Indian equities. The number of SIPs breached an all-time high in November of 2023 so far, recorded at Rs over 17,000 crore. The SIP investments in November 2023 surpassed the October number of Rs 16,928 crore, as per the Association of Mutual Funds in India (AMFI) data.
As per the AMFI data, the industry trade body for mutual funds, as of December 8, 2023, the mutual fund industry’s Assets Under Management (AUM) touched Rs 49.04 lakh crore in November 2023. This was given a push by the benchmark indices, touching all-time highs during the month.
The sachetising of SIPs is likely to further boost these figures, especially amid expectations of an aggressive entry by some top-notch players into the mutual fund universe.
Furthermore, SEBI has raised concerns over retail investors reaching out for unsolicited advice. At times, investors tend to approach unregistered advisers who run illegal or quasi-Portfolio Management Services (PMS) in the garb of investment advice and end up putting their money in risky investments or strategies.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.