 "Life insurance")
The Insurance Regulatory and Development Authority of India (IRDAI) has decided to set up a task force to examine the menace of mis-selling in the bancassurance channel. Until the regulator comes up with concrete steps to curb this malpractice, it is up to customers to protect their interests. Our lead story by Sanjay Kumar Singh and Karthik Jerome offers a number of suggestions on how customers can avoid falling prey to the tactics of relationship managers, who often prioritise commissions over client needs.
The demand for air purifiers is rising due to the high level of air pollution in North India currently. In this week's anchor story, Namrata Kohli offers detailed insights into choosing the right air purifier based on room size, filtration capabilities, and specific needs. She also offers handy maintenance tips for these devices.
The newsletter features a table on car loans which presents key details such as interest rates, EMI options, and processing fees from India’s top 18 lenders. If you plan to take this loan, review the table from Paisabazaar.com to make a well-informed decision.
Even after you have decided on the equity allocation that is right for you, you might find yourself uncertain about the optimal distribution across sub-asset classes like large, mid, and small-cap stocks. For a disciplined approach that ensures a minimum allocation of 25 per cent in each category, consider opting for a multi-cap fund. Check out Morningstar's review of the Nippon India Multi-cap Fund.
NUMBER OF THE WEEK
1.7 million SIP folios added in October
In October 2023, a record-breaking 1.7 million new Systematic Investment Plan (SIP) accounts were registered, raising the total number of folios to 73 million. This marks the sixth consecutive month of over one million folio additions, according to the Association of Mutual Funds in India.
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The inflow from SIPs reached Rs 16,928 crore in October, contributing to a total inflow of Rs 1.75 crore over the preceding 12 months. Assets under management for SIP-based investments stood at Rs 8.6 trillion.
SIPs have not only imparted stability to the Indian market amid substantial withdrawals by foreign institutional investors but also offer considerable benefits to investors in a volatile market. Persisting with SIPs during such times enables investors to acquire units at reduced prices, enhancing their long-term returns.
Furthermore, SIPs align well with the cash flow patterns of investors, particularly those earning a salary.
They also render market valuations less significant, allowing investors to maintain their SIP contributions regardless of the market’s high or low valuation, thus averaging their unit purchase costs. Conversely, lump-sum investments during periods of high market valuation carry heightened risks. A steep market downturn can lead to significant, albeit notional, losses in portfolio value, often causing investors to lose confidence and pull out their money at the wrong time.
