Mirae Asset Mutual Fund has decided to reduce the minimum Systematic Investment Plan (SIP) amount to Rs 99 for all its existing mutual fund schemes, barring the Mirae Asset ELSS Tax Saver Fund. The reduction in SIP amount will be applicable to monthly and quarterly SIP frequencies.
Mirae Asset Mutual Fund’s new adjusted SIP threshold is designed to enhance the accessibility of mutual fund investing, particularly for small retail investors and newcomers to the investment field. These modifications also provide increased flexibility for current investors in handling their investment portfolios.
Earlier, the minimum SIP amount for Mirae Asset Mutual Fund (MAMF) was Rs 500, with increments in multiples of Re 1 thereafter, and a minimum of five in case of monthly or quarterly options.
It is important to note that this notice-addendum must be considered as an integral part of the Statement of Additional Information (SAI) of the schemes of MAMF, subject to amendments made from time to time. All other terms and conditions specified in the SAI will remain unchanged.
The minimum SIP amount for the Mirae Asset ELSS Tax Saver Fund will continue to be Rs 500, with subsequent increments in multiples of Rs 500 for monthly and quarterly investment options.
The announcement is in line with the Securities and Exchange Board of India’s (Sebi) recent initiative of introducing micro SIPs aiming to broaden access to mutual fund investments in the country. The capital markets regulator expects a larger populace will have the opportunity to engage in mutual fund investments through SIPs starting from as little as Rs 250 per month. This Rs 250 SIP offers a gateway for numerous Indian individuals who were previously excluded from participating in mutual fund investments. By decreasing the initial investment threshold, Sebi is encouraging a wider demographic of our society to contemplate mutual funds as a viable investment avenue.
Last week, LIC Mutual Fund announced the introduction of a new SIP option with a nominal initial investment of Rs 100. Upon implementation of the proposed revisions, the daily SIP commitment would decrease to Rs 100, whereas the current amount stands at Rs 300. Similarly, the monthly SIP obligation would be reduced to Rs 250 from the existing Rs 1,000, and the quarterly SIP contribution will be lowered to Rs 750 from the current Rs 3,000.
The introduction of the Rs 100 daily SIP by LIC Mutual Fund caters to a specific demographic, including low-income investors, young professionals, and retail shop owners who aspire to nurture a consistent savings routine through daily investments, thereby aiding in better financial planning. This move signifies a proactive initiative that holds potential benefits for both the fund house and the investors alike.
While some experts feel micro SIPs will present an opportunity for a broader spectrum of Indian individuals to participate in mutual fund investments, some feel it won’t make much of a difference.
“LIC Mutual Fund introducing a Rs 100 daily SIP is a great step toward making investing easier and more accessible. It shows their commitment to helping people create wealth with small, manageable amounts. However, you don’t need to invest daily to see decent returns as even with monthly SIPs you are riding volatility quite well. We did the maths, and the difference in returns between a daily SIP and a monthly SIP is quite small—around 0.1 per cent. So, for most investors, sticking to a monthly SIP should be just fine,” said Shweta Rajani, Head – Mutual Funds, Anand Rathi Wealth Limited.
Read More: Mirae Asset Mutual Fund to reduce minimum SIP to Rs 99 for all schemes, except one. Check