It’s been proved again and again that mutual funds are a superior way of investing for investors. But every time you look at the numbers, you feel things could be so much better. In April 2017, the total investments in mutual funds crossed Rs. 19 lakh crores (Source: Business Line). This is much lower than investments in traditional options like FDs, RDs, and gold.
True, there’s been a jump in the number of investments and the number of SIPs started in the last few years, but considering the huge investing potential existing in India, the numbers at best give hope.
What is heartening to note, however, is the push by institutions to pitch mutual funds as a concept instead of their own individual schemes. The recent TV ads on the benefits of investing in Mutual Funds is one good example. Suddenly, people are looking at mutual funds as a single investment option that can be compared with other options like gold, FDs, real estate, etc. This was never the case before. The next step for these ads should be to educate investors on the ease of investing and the returns vis-a-vis other options.
One such exciting initiative that you may have come across recently is of Mutual Fund Day (MFD) that is celebrated on the 7th of every month. Launched by Reliance Mutual Fund, this is an interesting idea because the strength of mutual funds lies in regular investments. This is especially true for equity-based mutual funds where people can expect superior returns if only they stop to time the market and let long-term investing work its magic. By reminding people to invest in mutual funds right around the time their salaries hit their bank accounts, the MFD concept has a lot of potential. I liked the choice of date too (7th of every month) because that’s the time people have money in their accounts – and that’s the right time to allocate the money for investing. You can know more about the scheme, here: http://www.moneycontrol.com/prosperity-hub/.
The other concept, also launched by Reliance Mutual Fund, is an interactive quiz on Facebook called Fund for a Friend. Here, you can answer a few questions that reveal the personality of your friend and at the end of the quiz, you are recommended a type of mutual fund that your friend should invest in. I tried it and I got Balanced Fund as the answer. This was pretty close as my friend actually invests in ETFs and balanced funds. Would have liked more options as answers I felt, otherwise the quiz is short and easy to complete and you can share the answer with your friend. If you would like to try it out, click here: https://www.facebook.com/RelianceMutualFund/posts/10155457454169284
These are exactly the kind of initiatives that the mutual fund industry needs and I’m excited by the potential of both these schemes. The government, as well as the private players, need to focus on increasing the appeal and reach of mutual funds so that more number of investors start investing in mutual funds. Imparting information, making processes simpler and helping people understand the benefits of investing in mutual funds are steps that the industry should be doing more. I’m personally excited by these events and look forward to more such activities in the near future!