SEBI Chairperson Madhabi Puri Buch said that the capital markets regulator is working on a plan to start SIP from Rs 250. Talks are going on with mutual fund houses in this regard. We are trying to work with mutual fund houses to find out how we can start investing in SIP from Rs 250 per month.
Small systematic investment plans ( SIP ) of mutual funds will increase financial inclusion. This will create a strong foundation for future growth. SEBI Chairperson Madhabi Puri Buch has said these things. In an event he said that the Capital Markets Regulator is working on a plan to start SIP from Rs 250 . Talks are going on with mutual fund houses in this regard. He said that we are trying to find out in collaboration with mutual fund houses how the facility of investing in SIP from Rs 250 every month can be started. This is similar to what Hindustan Unilever did with shampoo sachets. This will increase financial inclusion. Also this will help in strengthening our market. SIP is based on the principle of regular investment.
Benefits of SIP
SIP is like a bank’s recurring deposit. In this the investor invests a little money every month. In this, instead of lump sum investment, the investor invests money every month or every quarter through the scheme of mutual funds. This statement of Buch has come at a time when the total asset under management (AUM) of the mutual fund industry in India has reached close to Rs 50 lakh crore. According to AMFI data, the AUM of the mutual fund industry reached Rs 49.04 lakh crore in November. The rise in stock markets also contributed to the increase in AUM of the mutual fund industry. Major indices of the stock markets have reached all-time highs.
Domestic stock market will get strength
Some mutual fund houses offer the facility to start SIP for amounts as low as Rs 100. But, this option is quite limited, as it is not practically possible for them to start SIP with this amount. Buch specifically mentioned how starting SIPs with lower amounts will boost the stock market. He told how domestic investors saved the Indian market from falling during the global crisis in the last one-two years. “Unlike other emerging markets, Indian markets have shown great resilience,” he said.
Domestic investment saved the stock market from falling.
He said, “The reason for the resilience of the Indian markets was the retail money which supported it. This money came into the market through direct investment by retail investors as well as through mutual funds. Those who were worried about the weak performance of the major indices of the Indian markets, came here. They returned here out of fear that they might miss the opportunity to earn higher returns. Thus, our domestic investment and retail flows had a double impact.” Buch also said that SEBI is considering a new asset class, which will be for investors with higher risk appetite.
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