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Crores of common investors put collective trust in the mutual funds market through systematic investment plans (SIPs), Radhika Gupta, the MD and CEO of Edelweiss Mutual Fund noted while praising the instrument on social media.
In a post on social media platform X (formerly known as Twitter), early on January 27, Gupta said that it is this “collective trust” in investment instruments that give the Indian capital markets its stability. She also backed SIPs as the “accessible savings-cum-growth solution” for crores of common Indian retail investors.
Gupta noted that crores of common Indian investors use and collectively trust SIPs, appreciating the mutual industry creating an instrument that has appealed to people's need for investment and savings.
“The mutual fund industry created an instrument that appeals not just to the investment needs, but the regular savings needs of Indian investors. We spend time educating investors and money marketing this solution. Today, crores of investors — common investors — use it and trust it, and that collective trust is worth 26,000 crores a month. That collective trust is what gives stability to our capital markets during periods of sharp FII outflows,” she wrote.
She added that SIPs have gained over the years, “SIPs make money for those who invest in them — check the ten year returns of an SIP in an equity fund even when markets deliver very average returns — and SIPs allow fund managers to deploy capital gradually.”
She also shared her experience with global counterparts who are impressed by the retail equity culture in India — the boost for which she credited SIPs. “When I met global counterparts they are impressed that the SIP has been part of creating a retail equity culture so quickly, something many countries are not able to do. It is major progress from a day when equity markets were believed to be speculative “satta”. Individuals are now aspiring to save and build larger SIP books,” she added.
Gupta further noted that SIPs provide the average Indian with an “accessible savings-cum-growth solution” to meet their needs and blasted “clickbait articles” which claim mutual funds are a scam.
She wrote: “Yes it isn't perfect. But it works. And works very well. This accessible savings-cum-growth solution for a critical Indian need deserves to celebrated not belittled. The clickbait articles of mutual funds being a scam and retail investors being silly do not do our citizens any service.”
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