FundsIndia launches SIP that adapts to market –
Introducing FundsIndia SmartSIP
Chennai based FundsIndia, the country’s largest retail investment platform, announced
today that it is launching FundsIndia SmartSIP, in association with Franklin
Templeton AMC, for its customers. This first-of-its-kind servicecombines the
discipline of SIP along with dynamically managing the monthly SIP allocation to
each fund based on market conditions.
SmartSIP invests in an equity fund and a debt fund, from the Franklin
India stable, every month. By default, the equity fund’s allocation would be
70% and the debt fund would receive 30%.However, allocation to the equity fund
and the debt fund will dynamically change every month based on both market fundamentals
and momentum factors.
FundsIndia’s co-founder and COO
Srikanth Meenakshi spoke about the need for this product in the
market – “At FundsIndia, we have been listening to what our investors are
seeking for a decade now, and this product grew out of understanding these
requirements. With SmartSIP, an investor can make smart allocations between
equity and debt every month based on the signals we receive from a well-proven
quantitative model. And what’s great is that this adjustment does not disturb
the investor’s monthly savings. There’s no need to increase SIP amount or
reduce it in order to benefit from dynamic allocation. This ensures that
savings are disciplined and there is no compromise on reaching the desired goal”.
Ms. Vidya Bala, FundsIndia’s head of
mutual fund research, elaborated further – “There are various
factors to consider when deciding an asset allocation that takes advantage of
market conditions. This dynamic model developed by experts shows back-tested capability
of beating a regular 70:30 SIP by up to 2.6% CAGR over the long term. This is
possible because the model seeks to reduce fresh equity allocation and increase
debt allocation in a market turning expensive and increase equity allocation in
correcting markets. The product reduces an investor’s urge to time the market.More
importantly, it contains downside risks better than a static portfolio.”
Mr. Sanjay
Sapre, President, Franklin Templeton Investments - India, on the association said, “SmartSIP
is a prudent move by FundsIndia to offer asset allocation solutions to
investors vis-Ã -vis pure products. India is still a very nascent market for
mutual funds as we have only tapped about 2% of the population. A majority of
potential Indian investors still have an assured returns mindset and look at
mutual funds for the higher returns but lack the risk appetite for market
volatility. SmartSIP, a solution which offers a combination of market upside
coupled with a potential downside risk limitation, will help to reassure
investors to stay invested over longer timeframes. Through SmartSIP, we believe
our partnership with FundsIndia, one of the largest online mutual fund
investment platforms, will enable us to build scale in a more meaningful
manner.”
From an investor’s perspective, this service will be quite simple to
use. There will be a single amount being debited from their bank account and
the same will be dynamically invested in the SIP funds. The set-up and monthly
allocations will be taken care of by the system and the investor will be aware
of how much money goes to each fund, every month.
“This provides twin benefits to the investors”, said C R Chandrasekar, CEO of FundsIndia.
“Our customers are always worried about two things – one, whether they are
investing in the right funds, and two, whether they are investing right in the
current market. This solution addresses both questions in an objective,
impartial manner. Theyalways ask ‘How do I build wealth without incurring more
risk?’ We have tried to find the answer using mutual funds and a quant model to
guide the allocation dynamically. That it does so in the context of the simple
SIP structure is an added bonus”.
This service is available immediately in the FundsIndia platform with a
minimum SIP investment of Rs 5000 a month. One can learn more about it by
writing to contact@fundsindia.com or by visiting www.fundsindia.com/smartsip.
About FundsIndia:
FundsIndia, an initiative of Wealth India Financial Services
Pvt. Ltd., is India’s first online-only investment website. A free investment
platform, it offers an array of financial products like mutual funds, equities,
and deposits. FundsIndia has over 1.5 lakh investors on board, over Rs. 4500
crore in AUM, and processes 2,40,000 SIPs every month. FundsIndia also offers
value-added services like free financial advisory services, flexible SIPs,
trigger-based investing, access to India’s most comprehensive automated advisory
service – Money Mitr, and more.
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