3 New Initiatives Launched by AMFI to Improve Reach of Mutual Funds. Here’s All You Need to Know

Particularly during the COVID-19 pandemic times, a lot of investors in the endeavour to earn better returns turned to mutual funds. SIP contributions have seen an almost consistent increase since January 2020, and today, the SIP assets (at Rs 13.19 trillion) comprise 19.6% of the total mutual fund industry assets.

Despite volatility, SIP contributions have remained rather robust. Those who started SIPs around the lows of the COVID-19 pandemic have largely benefited. Investors have recognised that SIP-ping into mutual funds brings the needed investment discipline and could potentially help accomplish the envisioned goals.

[Read: Should You Stop Your SIPs Now Amid Falling Equity Markets]

Making the most of the encouraging SIP flows, AMFI has now launched three initiatives: 1) SIP for smaller investments, 2) Tarun Yojana, and 3) Mutual Fund Investment Tracing and Retrieval Assistant (MITRA)

Let's understand each of these...

1. SIP for Smaller Investments

This initiative is in line with the Securities and Exchange Board of India's (SEBI's) proposal of 'sachetisation of mutual funds. The intent is to offer smaller SIPs of RS 250 or lower. Currently, some fund houses, in certain schemes, are allowing investors to do SIPs with as little as Rs 100, but many are staying away from offering micro-SIPs.

To make it viable for the mutual fund industry, the capital market regulator has proposed that a part of the cost of investment for the Asset Management Companies (AMCs) and certain incentives for financial inclusion be compensated from the Investor Education and Awareness Fund. This shall further reduce the break-even time for AMCs.

SEBI via its consultation paper released in January 2025, proposed that small ticket SIPs can be offered in any scheme except for Debt schemes, and Sectoral & Thematic Schemes, Small-cap and Mid-cap Schemes under the equity schemes category.

The investor enrolling for smaller SIPs may be offered the Growth Option and such an investment may be held in Statement of Account (SOA) mode or demat mode, as per SEBI.

2. Tarun Yojana

The youth today, with information at their fingertips, are curious about the functioning of the capital market and its ability to create wealth. AMFI recognises the importance of financial literacy for Viksit Bharat (developed India).

The Tarun Yojana seeks to integrate financial literacy into school curricula, equipping young minds with foundational knowledge of investment principles. This is a part of the investor education initiative to inculcate from a very young age a sense of saving and investing in wealth-creating avenues, which can help accomplish financial goals.

The slightly older youth who are in college or just out of college with information at their fingertips, are already participating in the capital markets or influencing the investment decisions of their parents.

Both the aforementioned initiatives from AMFI are intended to achieve financial inclusion and improve the reach of mutual funds to a wider section of the population.

Here's what AMFI, Chairman Navneet Munot said in a statement to the media:

At present, despite the surge in mutual fund folios and demat accounts, only around 3-4% of India's population is investing in mutual funds. Even in terms of India's mutual fund AUM as a percentage of GDP, it is around 17%, whereas in the developed countries, it is much higher (over 70%). The global average of mutual fund AUM to GDP is around 65%. This brings out untapped potential for the Indian mutual fund industry, while the country aspires to be Viksit (developed nation) by 2047 - the 100th anniversary of independence.

3. Mutual Fund Investment Tracing and Retrieval Assistant (MITRA)

This initiative of AMFI offers a single-stop solution for investors to trace, find, and recover their missing, inactive or unclaimed mutual fund investments.

MITRA is an online platform where investors can enter basic details and view information about their forgotten or old mutual fund investments AMCs. The platform is being developed in collaboration with AMCs and industry stakeholders to ensure seamless access to mutual fund folio data.

The key objective is to minimise unclaimed mutual fund folios and make sure that investors can administer their investments effectively. MITRA is expected to become operational soon, with regulatory approvals and technical integrations currently underway. To learn more about MITRA, click here.

"Through these initiatives, AMFI aims to lower entry barriers, instil financial literacy at an early stage, and provide investors with mechanisms to track and retrieve their investments. Our focus remains on building a well-informed and confident investor community," said AMFI CEO, Venkat Chalasani.

To conclude...

In my view, the initiatives taken by AMFI are steps in the right direction. Facilitating SIPs with smaller investments would result in the next phase of growth of SIP AUM with financial inclusion. That being said, investors should also ensure that SIP contributions are meaningful to beat inflation and help accomplish the envisioned financial goals. Watch this video:

As regards Tarun Yojana, while it seeks to integrate financial literacy, the curricula needs to be made more practical with case studies to educate young minds to link investment with financial goals and not make it theoretical. This shall intrigue the young ones to apply their knowledge in real life rather than merely learning concepts.

MITRA will help investors to keep track of their investments and reclaim the forgotten or inactive ones. It shall do away with time-consuming paperwork, identification proof, and legal procedures to claim the investments.

Mutual funds are a worthy avenue for wealth creation, but a thoughtful approach needs to be followed for a rewarding experience.

Happy Investing!

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Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.