So recently in one of the Z-Connect posts, I found that Coin SIPs aren’t actual SIPs but lumpsum periodic investment, but I am more interested in actual SIPs, AMC SIPs are actual SIP that cannot be paused.
How can I convert from SIP(in reality, periodic lumpsum investment) to AMC SIP(real SIP, benefit is that sometimes AMCs stop fresh lumpsum investment out of nowhere, in such a case some investors will be left stranded but if you have AMC SIP your investment will continue)?
You cannot convert your SIPs. If funds stops accepting lumpsum investmets, we’ll open up the AMC SIP mode for those funds and you can continue investing, that shouldn’t be an issue.
We have done the same for Reliance smallcap fund, SBI smallcap fund, ICICI smallcap fund and Mirae Emerging Bluechip fund.
Please tell me, how will it play out? I don’t get the complete picture.
Suppose I have invested 50K (including previous profit on the Mutual Fund and minus broker fee, exit load etc. the total comes out to be 50K) via SIP(periodic lumpsum), then the AMC stops accepting fresh lumpsum investment.
In comes Zerodha they take our stash & start an AMC SIP, with first installment of 50K then monthly uninterruptable installment of desired amount, say, Rs X?
I am investing in Fund X through Coin as SIP, which is technically a lump-sum.
At AMC level, Fund X is currently accepting both lump-sum and SIP. Thus I am able to invest through Coin.
Suddenly, the AMC stops accepting fresh lump-sum and SIP mode both for Fund X. (e.g. SBI Small cap has done it in past). Only those who are already invested in SIP can continue their SIP.
I won’t be able to continue my investment in Fund X through Coin because lump-sum mode is closed by AMC.
Coin will react to this change and take some time to open the AMC-SIP mode, but remember AMC has already stopped accepting fresh SIP for Fund X.
So essentially, I won’t be able to invest in Fund X anymore until AMC reopens it.
It’s as simple of this. If a fund stops accepting lumpsum investment, we’ll open up the AMC SIP mode of investing. You will just have ti restart the SIP.
If this happens, which it very rarely does, then yes, you won’t be able to invest. This has so far happened only in the case of a couple of smallcap funds.
But the alternative is that you also have an option of investing in an alternative small-cap fund. With the new SEBI reclassification norms, the universe of stocks available for the fund managers to pick from is tightly defined. So, over a period of time, you will see that the return profiles of these stocks will be similar.
Doesn’t take much time for us to do this. If a fund stops fresh lumpsum inflows, the new mode SIP will be available on the next day itself.
Will this result in two folios?
One folio for the earlier lump-sum investment and the second folio for the AMC-SIP rescue mode.
Even I was pondering upon this for a while. I know this is not a technical question and off-topic to this thread but since you’re more experience than me in this field of study, I couldn’t help but ask your point of view on when every fund will look same, giving almost similar returns, wouldn’t it be a saturated me-too market. Stagnant and mediocre!
(e.g. on another thread on tradingqna, we were discussing that 117 funds have HDFC as top holder in their portfolio. Even the Contra funds that are supposed to bet against the market are having it.)
How would you find a winner in such a market? Or would it be cyclic in nature - the funds will take turns in beating the other one, which will be momentary.
Hi @Bhuvan,
I couldnt find Mirae Asset Emerging Bluechip Fund in the list of direct mutual funds.IS that fund operating under a different name now because of reclassification?
This is what I am afraid of, I don’t want to start with another AMC. I just want my funds to continue for a period of 25 - 30 years, till then there is no guarantee that my current AMC provides with lumpsum or not. Please, I think Zerodha should consider to give users an option to convert to AMC SIP.
Hi @Bhuvan,
This fund Emerging Bluechip Fund is not showing in Coin Web UI ,but I can see the same in Coin Android APP.Is this intentional or some sort of bug??
Closet indexers. They’ll have to justify the high fee somehow and this currently seems to be a working formula.
There will be a lot of bad funds, no doubt about that. I personally don’t invest in any smallcap funds. But if I were, that things that would matter to me is if the fund has chosen the right benchmark and if it is beating the TRI index. If not then, there is no point in paying for underperformance. I’d invest in smallcap index fund, but the problem in India is we don’t have a smallcap index fund. I hope that this changes over time.
You are essentially betting on the fund manager. The trick is to choose the right one which is easier said than done.
Come on! It’s a mobile first word we are living in You can still track you investments on the web.
@Bhuvan yes mobile first is correct.But remember Flipkart’s mobile first approach which backfired .I think this would be detrimental to your business if you are restricting options for the users.And doesnt coin UI and android app depend on the same backend data to pull the funds info.If so why should there be restrictions??
Flipkart reminded me what the SBI AMC guys told me recently - Both Paytm and Flipkart are coming up with their Mutual Fund Investment platform. In six months or maybe sooner than that. Needless to say, it would be direct funds and free.
@Bhuvan Still couldn’t understand why those AMC-SIP funds are available exclusively only on the mobile app. Maybe you want to increase the downloads of the app with this restriction. I am just guessing, I may be wrong.
But think from the user’s point of view. It would be better to let the user decide where he wants to invest from - web browser or mobile app.
