“There is lack of awareness about debt SIPs. SIFI can help generate better risk-adjusted returns, and your debt fund SIP can help cushion the impact of higher volatility in equity markets, thereby balancing your allocation,” says Vishal Kapoor, CEO, IDFC AMC.
Many investors use SIP to invest into mutual funds, especially equity funds, as it allows to them invest regularly wihout bothering about volatility or prevailing market conditions. However, since debt mutual funds are realtively less volatile than equity mutual funds, SIP investing is not very prevalent among debt mutual fund investors.
“Industry data indicate that during turbulent times, investors tend to either stop or pause their SIPs, mostly because they are worried about the downside. A good habit of disciplined savings developed over many years is therefore getting negated. Investors should instead have a SIP in Fixed Income (SIFI), as it could help cushion the fall during downturns in equity markets when SIP returns in equity turn negative, thereby playing an important part in balancing your allocation,” says Vishal Kapoor.
IDFC Mutual Fund’s SIFI initiative aims to inform investors how a combination of equity and debt SIPs can help them navigate troubled times.
“SIFI can help generate better risk-adjusted returns, and your debt fund SIP can help cushion the impact of higher volatility in equity markets, thereby balancing your allocation,” says Vishal Kapoor, CEO, IDFC AMC.
In a communication sent to investors, the fund house said that fixed income funds have helped provide required stability to investors’ portfolio while keeping investments liquid. However, most retail investors generally make debt fund investments on a lump sum basis. The fund house says that SIPs in debt funds can be really helpful in taking advantage of interest rate movements and tackling volatility in the debt space.
As part of the campaign, IDFC MF is making videos in various languages explaining how SIPs in debt mutual fund will be easy to do, liquid and benefit from cost averaging in times of volatility.