In an attempt to attract fresh retail money into equity schemes, fund houses have begun launching ‘daily SIP’ plans that allow investors
to invest a small sum of money every day, if they so wish to.
While Bharati Axa and Sahara Mutual have already launched daily SIP plans, several other top fund houses are also considering similar plans or make their existing SIP plans more flexible.
“Contrary to monthly SIPs which have a date system (where fund houses set the dates for collection of SIP money
through the ECS route or post-date cheques), daily SIPs are more flexible, as they invest directly in that particular day’s market,” said Vikaas Sachdeva, country head (business development), Bharti Axa Investment Managers.
“This is an ideal risk-mitigation product. Daily SIPs allow investors to have a better play or control over market volatility,” he added. Bharati Axa has a daily SIP plan that starts at Rs 300 while Sahara Mutual has a Rs 10-a-day plan.
Fund houses are coming out with such plans to include customers of varied backgrounds and in the process increase their retail investor clientele.
“Daily SIPs — though it may look very retail or small investor-focused — could also be an HNI product. There are many high net worth individuals who use the product to make chunk investments and capture every minute levels of market volatility,” said mutual fund expert Vijay Venkatram.
According to fund marketers, daily SIPs — and even micro-SIP plans, where minimum monthly investment is very low — are high-cost products for the fund house. Thanks to its recurring investment nature, operational expenses like bank charges, cheque/cash collection charges and registrar (registrar and transfer agent) charges are much higher in daily SIPs than monthly SIP plans.
“For sure, we’re a bit stretched at Rs 300-a-day, but at a daily investment of Rs 450-500 a day, we’ll easily be able to make it a viable proposition,” Mr Sachdeva added.
However, there are a few fund experts who believe daily SIPs are not a product for the salaried class. To counter competition, a few fund houses have launched monthly plans where investors can make staggered payments throughout the month (in three or four installments).
“The concept of investing on a daily basis is good for people who earn daily wages. The invested fund is better utilised when it is made in small tranches throughout the month,” said the channel head of a Mumbai-based fund house.