IANS | 28 Mar, 2024
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.
(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)