We are living in unprecedented times. The pandemic has affected markets and economies worldwide. Mutual fund investors, especially those invested through Systematic Investment Plans (SIPs), are worried about the impact that the market volatility might have on their portfolios. In such a scenario, what is the best way to safeguard one’s investments?
Said Swarup Mohanty, CEO, Mirae Asset Investment Managers (India) Pvt.Ltd, “These are definitely very abnormal times. Some of the thought is quite logical. But, every SIP is done with a goal in mind and every SIP has a path. Stopping your SIP would, therefore, mean completely derailing yourself from that path. Volatility remains the best friend of an SIP investor."
Mohanty was speaking in the first episode of ‘Winning Over Volatility’, a four-part interview series that highlights how you can manage your mutual fund investments amid the economic downturn. It is being organized by Livemint, in association with Mirae Asset India.
Mohanty further highlighted how the current SIP investors in India are wiser than what they were during the 2008 financial crisis. As a result, the number of people stopping their SIPs this time around is lesser than what it was in 2008.
He said: “Between June 2008 and July 2009, which was the most volatile period, SIP investors actually added .8 XIRR (extended internal rate of return) over their possible returns if they had stayed invested. I think that’s something people have learnt very well. It’s wonderful to see this maturity of the Indian investor."
To know more, watch the video here.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.