Systematic Investment Plan with a Timely Twist

28 09 2008

 

Bharti-AXA, a new kid in the Mutual Fund block has come up with an innovation – Daily Systematic Investment Plan (SIP) as opposed to monthly SIPs offered by other MFs.

 

 Bharti-AXA allows the investor to invest as little as Rs. 300 per day in their equity fund. Investments of higher amounts in multiples of Rs. 100 too are allowed.

 

As the market is witnessing high volatility even within a single trading session, buying a small number of units everyday is a good idea. When the market is up, the number of units bought will be fewer and when the market is down, the number of units bought will be higher. This brings down the average cost of units. The main advantage of SIP is  that  Rupee Cost Averaging is being done on a daily basis instead of  monthly basis.

 

The macro-economic scenario is looking rather uncertain now. Even experts are not able to decide whether the market has bottomed out. Daily SIP looks like a smart idea to take gradual exposure in the equity markets.

 

As the Bharti-AXA is a newbie, their investment performance is unknown. It may be prudent to wait for the older schemes of top MFs to come up with daily SIPs.

 

– G. Mohan

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