The Mutual Fund Show: Informed Investors Important For 'Har Ghar Nifty', Say Experts

With SEBI Chairperson Madhabi Puri Buch pushing for 'Har Ghar Nifty', industry experts feel that education will play a key role in initiating the process.

While the idea seems appealing, there are some challenges that need to be addressed.

Monika Halan, author of Let's Talk Money, said it's important not to scare away fledging investors. "...This is not a Maggie noodles. This is a slow cook and therefore, the product choice is so important," Halan told NDTV Profit.

According to Vishal Kapoor, chief executive officer at Bandhan AMC Ltd., technology can be used to reduce gaps.

While many people are aware of mutual funds, they are not aware of how to invest or what to expect in the mutual fund market. Artificial intelligence and mobiles can be used to educate people, in order to have more informed investors, said Kapoor.

'Chota' SIPs are a powerful idea, he said. It is a medium for new investors to try, before they get comfortable to take more risks, Kapoor said.

"If this is a first-time investor, where the potential or tolerance to capital risk is very low and you want to start the habit, then some of these other products that the mutual fund offers may be a good starting point... And then, eventually some amount of risk capital can be maintained into the product choice that is available," he said.

Halan recommended limiting the SIPs to indices, as it will limit the risks for investors and benefit the fund managers. This, according to Kapoor, will be a step in the right direction.

Watch the full conversation here: