The industry has tried micro SIPs in the past, with little success. SBI MF’s new Jan Nivesh SIP offers the MF industry its best chance yet of creating its own Jan Dhan moment, with a carefully planned low cost model that is both scalable and cost-effective.
Lower transaction costs, simpler KYC, lower RTA costs, fully digital experience, SIPs starting at Rs.250, features including daily SIPs for small and micro businessowners and investment only in SBI BAF – all come together to make Jan Nivesh SIP the best foot forward to penetrate deeper than the industry has ever managed to.
There’s good news that DP Singh shares on hybrid funds. Conservative hybrids are likely to be allowed some allocations into arbitrage to enable them to cross the 35% gross equity exposure limit and get favourable tax treatment even as they maintain net equity at 10-20% levels.
Expect more regulatory relaxations across the range of hybrids where the residual “others” category is now likely to be expanded in scope to include commodities, REITS, InvITs etc – thus allowing multi asset exposure across the range of hybrid funds and not just in MAAFs.
On SIP stoppages, DP Singh clarifies that the headline number of SIP closures now crossing 100% of new SIPs (109% in January) is largely due to small ticket DIY/fintech SIPs getting terminated. In terms of value, the number is between 20-30%, indicating that larger value SIP investors are by and large continuing their SIP journeys through this market correction.
MFDs have done a commendable job guiding their SIP investors – which is borne out by SIP longevity in this channel.
While this correction has made investors anxious, it is also driving home the benefits of embracing asset allocation solutions and goal based investing. Distributors who have adopted this approach will gain market share rapidly in these times, when product suitability analysis and good guidance are finally being valued appropriately.