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Monday, January 17, 2022

SIP investment can reach 20,000 crores: DP Singh

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  • 1.70 crore investors are investing every month

Ours Providing better returns to the investors, SBI Mutual Fund continues to hold the number one position with a management fund (AUM) of Rs 5.11 lakh crore i.e. Rs 5.11 trillion. The number of investor folios of this mutual fund of State Bank Group has also crossed one crore. While the management corpus of the entire mutual fund industry has also reached a record high of Rs 33 trillion with 4.5 crore investor accounts. It has increased 4 times in the last 10 years. Investors are increasingly attracted to Mutual Funds due to higher returns as compared to other traditional investment avenues. In this regard, Chief Business Officer, SBI Mutual DP Singh from Commerce Editor Vishnu Bhardwaj Had a detailed conversation. Here are the highlights of the discussion:-

SIP is becoming popular among mutual fund investors. What are the reasons for this?

The biggest reason why Systematic Investment Plan is popular is that investors are getting good returns on their regular savings with minimum risk and building their wealth. Secondly, SIP is one such way for the retail investor. In which they can also make a small investment of 500 rupees. This investment can be made weekly, monthly, quarterly, half yearly or annually as per your convenience. In this they also get the benefit of market fluctuations. Therefore, the number of investors investing through SIP is increasing. Today, out of a total of more than 3 crore mutual fund investors in the country, about 1.70 crore investors are investing Rs 8800 crore every month. We expect this figure to reach Rs 20,000 crore in the next two years. Out of the total more than 65 lakh investors of SBI, about 45 lakh are investing through SIP.

Seeing the boom in the stock market, more than one crore investors have come to the market in the last few months. What is your message to these new investors?

Due to the Corona crisis, the practice of work from home increased. Because of which people are investing thinking that some extra earnings can be made in this market, new investors have stepped here after seeing the boom of the market, earning is easily done in the boom. But investors should keep in mind that there is a lot of risk in this market. Because investing is like a business. Investing without doing research can burn your hands at any time. SBI Mutual has a team of over 60 analysts who do thorough research before investing in any company or sector. Therefore, for new retail investors, instead of investing directly in the market, investing through mutual funds has lower risk and better returns.

How does a retirement portfolio help in leading a comfortable retirement life?

Retirement portfolio is a long term plan. SBI Retirement Benefit Fund helps retirees lead a comfortable life with a target to meet future needs depending on the age and risk appetite of each investor. Investors can add such funds to their overall investment portfolio to make their retired life worry-free.

What are Fixed Maturity Plans and how are they better than FDs?

Fixed Maturity Plans are close-ended debt funds that offer investments at prevailing returns with a fixed lock-in period. Considering the possibility of lower levels of fixed deposit (FD) interest rates in the near future, investors can consider investing in fixed maturity plans at the prevailing market yields. These funds offer inflation-adjusted returns which are better than FDs. Investments made in fixed maturity plans for a period of more than three years offer indexation benefits. This reduces the tax burden on the investors.

What is SBI Mutual’s investment strategy in the current market scenario?

We do not have a single investment strategy, it varies for different schemes. Each scheme i.e. fund is managed on the basis of its investment objective and investment strategy. Generally we avoid focusing on short term market conditions. Our investment strategy, in any market scenario, is based on the investment objective of the scheme. We aim to help investors meet their financial goals and assist them in wealth creation for the long term.

How is SBI Mutual different as compared to other fund houses?

At SBI Mutual, we do not just offer products to the investors but we strive to provide financial solutions suited to their needs and better returns while accompanying them at every step in their financial journey. We decided to follow the principles of Environmental, Social and Corporate Governance (ESG) and launched the country’s first ESG Fund. In addition, the internal processes and protocols we have developed so far have kept us well positioned during difficult times. SBI has performed well despite the challenges of the last one year.

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Bhagyashree Soni
Bhagyashree Soni is a software engineer with soft writing skills. She is a degree holder from the International School of Entrepreneurial Leadership. She has been a state-level badminton champion and chess player. A woman with a forthright attitude enjoys her writing passion as her chosen career. Writing in the context of feminism, social-cause and entreprenurship is her forte.
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