Founded in 2012, Bengaluru-based fintech firm Scripbox provides financial solutions ranging from small expenses management to equity investment. One particular area they specialise in is mutual funds. In an interview with Arshad Khan, founder and COO of Scripbox Sanjiv Singhal talks about choosing a fund advisor, lumpsome investments vs SIPs, long term investment goals and more. Excerpts:
What simplifying solutions do you provide investors?
The idea behind Scripbox is to help individuals invest without confusing them with financial jargon, automate best practices and enable them with actionable money skills. We simplify every step of wealth creation and offer financial solutions for needs across life stages — such as creating an emergency fund, investing in tax saving funds, and investing for short term goals (vacations, cars, etc) and long term goals (children’s education, retirement, etc).
We started in 2012 and now have customers across 1250+ cities and towns who have made, 2 million+ investments aggregating to approx `900 crore. This is still a drop in the ocean, as the proportion of people investing in mutual funds is still only 2-3 per cent.
What is your view on MFs given the liquidity issue?
The industry is mature with capable managers and robust processes. Investors need to spend time selecting fund managers based on track record and then trust them to make the right decisions.
Shouldn’t investors wait for sometime and invest when there is more clarity?
Volatility is the very nature of markets. Over the long term, the ups and downs even out and your discipline will result in the achievement of goals.
We also strongly believe that saving and investing should be driven by financial needs and goals and not by market movements. Focusing on the latter will require frequent changes in saving and investing behaviour, resulting in failures in achieving the investor’s goals.
Lump sum or SIPs, which is the preferred mode and why?
We advise our customers to make saving and investing an important part of life, to make it a habit. When it comes to creating wealth over the long term, using a systematic investment plan is a great way to do it.
How correct is ‘invest when the market is down’?
This is a trading message, which assumes that the investor has money lying around or is constantly allocating money between cash and equity. If you have a clear goal and are investing regularly, all your surplus is likely to already be allocated and it doesn’t make sense to change that allocation based on where the market is.
Any alternatives to MFs giving healthy returns?
We think it’s wrong to evaluate MFs, or any investment, in terms of return. It’s important that an investor begin by asking: what am I saving for, how many years do you want to achieve the goal, how much can I save, etc. These will help define the instrument.