Fund houses are signing new SIPs every month even as the equity markets are sliding
SIPs continue their rapid growth rate in 2011, with fund houses signing new SIPs every month. Fund houses and distributors are positioning SIPs as the ideal way to make market volatility work for you especially when the markets are underperforming. This seems to be the reason for the spurt in new SIPs.
“A meaningful investment should offer ‘real’ returns that help preserve and ensure the growth in value of money, over a period of time and help investors achieve their financial goals. SIP is one of the best investor friendly modes of investing,” says Sundeep Sikka, CEO, Reliance Mutual Fund.
Besides inculcating a savings habit, SIP eliminates the need to time the market, making it less exposed to risk and ensures maximum returns, believes Sundeep.
“Our SIPs have grown manifold and today the number is close to 16 lakh. We are adding close to 2 lakh new SIPs every month. Most SIPs are in the range of Rs. 1800 to 2000 per month on an average,” added Sundeep.
Investors are buying SIPs to take advantage of the bearish conditions. “When the market trend is difficult to predict, SIPs are one of the effective ways to get investors to invest in equity funds. Through the SIP route, the investor is able to make the market volatility work in his favour through the rupee cost averaging concept”, said Ramesh Kabra of Taurus Mutual Fund.
According to industry sources, presently there are 60 lakh SIPs in the industry and this number is growing each month.
“We are seeing a steady increase in the number of new SIPs being signed every month. This is a positive trend as more sticky money comes through the SIP route”, added Ramesh.
