Seeking to tap a larger number of small investors, the mutual fund industry is going all out with investment plans of as low as Rs 100 per month and Reliance Mutual Fund has become the first fund house to launch such a scheme.
Small investors, wary of the stock markets which is witnessing volatile period currently, prefer to invest in mutual funds through their Systematic Investment Plans.
This serves the dual purpose of regular savings and healthy returns in addition to offering small investors a crucial hedge against the volatile markets.
With the minimum investment in SIP at Rs 500 so far, Reliance Mutual Fund, an Anil Dhirubhai Ambani Group company, has become the first AMC in the country to offer investment in Systematic Investment Plans at Rs 100 per month, a company statement said.
"This move is aimed at helping more and more people access the benefits of mutual funds while reducing the entry barrier significantly," said Reliance MF President and CEO Vikrant Gugnani.
With the entry level of SIP at Rs 100 per month, investors would be in a better position to use 'rupee cost averaging' as investments spread regularly over a period of time would result in the average cost per unit coming down.
The mutual fund industry lost over Rs 26,000 crore (Rs 260 billion) with the combined assets under management (AUM) falling to about Rs 326,000 crore (Rs 3,260 billion) in March, according to AMFI data.
At the end of March, stock market volatility and redemption from liquid funds ate into the asset values of most mutual fund houses. However, Reliance MF's AUM rose to Rs 46,306.77 crore (Rs 463.067 billion) in March, making it the largest fund house in the country.
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