New Delhi, Mar 27 (IANS): The retail investor has realised that SIP is the financial version of ‘fill-it, shut-it, forget-it’, the popular tagline from an '80s motorcycle advertisement, Venkat Chalasani, Chief Executive of the Association of Mutual Funds of India (AMFI), told IANS.
"You don’t have to remember to invest every time, as once you start an SIP, you can keep it on for how many months/years you wish to. Investing and withdrawal are both easy," he said during an interview.
On the growing trend of SIPs, the AMFI chief said that the Indian investors have realised that if they want to grow with the progressing economy, create wealth over the long term, and overcome inflation, they must take part in the capital markets.
“Since not everyone has the resources of time, money, and knowledge to invest directly in the markets, the next best available option is mutual funds. Mutual funds, via the SIP route, offer equity investing at amounts as low as Rs 500 per month," he said.
On the projection for growth in MFs' AUM, the AMFI chief said, “In 2019, we had released a whitepaper with BCG titled 'Unlocking the Rs 100 Trillion Opportunity', wherein we outlined the industry’s aim of Rs 100 trillion AUM and 10 crore unique investors over the next few years.
"The industry has reached mid-way, with over Rs 54 trillion AUM and over 4.30 crore unique investors, and we are confident that we will hit the Rs 100 trillion AUM and 10 crore unique investors mark sooner than expected."
Chalasani also said that financialisation of savings is growing, especially after the Covid-19 pandemic.
“During the pandemic, people who wanted to liquidate their physical assets realised that it was not easy. Either there were no buyers, or they had to sell at a disproportionate discount to liquidate, especially in real-estate. Liquidity in physical assets was a big challenge," he said.
The continuous investor awareness campaigns being run by AMFI, SEBI, mutual funds, and even the RBI ensured that, over the years, people realised the importance of financialisation of savings and how different asset classes can help them achieve their various financial goals, he said.
On the recent advisory on small and midcap funds, the AMFI chief said the industry has been proactively taking precautions, wherever required, to ensure that the interests of all the investors are safeguarded.
“The industry is aligned with the regulator SEBI and is working in partnership with the regulator to ensure that the investors make an informed decision when investing in mutual funds," he added.
The Indian mutual funds industry is among the most transparent ones worldwide with many global first disclosures, regulations, and investment options available for the smallest of investors, he said.
On the participation of small towns and cities in the growing equity cult, Chalasani said participation from B30 cities (industry parlance for Beyond the Top 30 cities in terms of mutual fund AUM) has indeed grown over the years.
As many as 25 per cent of the individual investor assets of the mutual fund industry came from B30 locations in February 2024. B30 Investors had a 45 per cent share in the number of folios in February 2024 as against 41 per cent in March 2020.
“The proliferation of digital platforms and mobile apps has made investing in mutual funds more accessible to people in small towns and cities. Investors can now easily research, compare, and invest in mutual funds through online platforms, eliminating the need for physical presence in larger cities," he said.
“SIPs have gained popularity among investors in small towns and cities due to their affordability and convenience. Investing small amounts regularly over time has become a preferred investment strategy for many, allowing them to participate in the equity market with minimal risk. Just last month, a fintech firm opened 1 million new SIP accounts alone," he added.