Kotak Mahindra Asset Management Co. became the latest to announce the launch of the 'Choti SIP' facility. The Systematic Investment Plan will be available for all eligible schemes of Kotak Mahindra Mutual Fund, it stated in a press release on Thursday.
The Securities and Exchange Board of India and Association of Mutual Funds in India recently introduced the Choti SIP or small ticket SIPs, in a bid to introduce more Indians to mutual funds. “Only about 5.4 crore unique investors of India's population are mutual fund investors, leaving a massive, untapped opportunity for penetration and bringing the Indian saver closer to financial freedom," said Nilesh Shah, managing director of Kotak Mahindra AMC. "SIPs have been an excellent way to bring new investors and kickstart their mutual fund journey."
The rationale behind 'Choti SIP' is to make mutual fund investments more accessible to a wider audience, particularly first-time investors, by lowering the entry barrier. The investor must not have previously invested in mutual funds (SIP or lumpsum) at the industry level. The investor must invest in the Growth Option and commit to a minimum of 60 installments on a monthly basis. The payment of installments should be made through NACH or UPI auto-pay only.
Aditya Birla Sun Life Mutual Fund and SBI Mutual Fund are among others to have recently launched 'Choti SIPs'.
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