Closely following on the heels of a cut in minimum investment amount in various schemes of Aditya Birla Sun Life Mutual Fund, ICICI Prudential MF has also cut the minimum investment amount for various schemes. The ICICI MF cut is of a stronger magnitude, lowering the minimum investment amount to Rs 100 compared to the Rs 500 set by Aditya Birla MF. In case of ICICI Prudential Liquid Plan, the minimum amount of additional investment has been cut to just Re 1.
The schemes included in these cuts are ICICI Prudential Liquid Plan, Savings Fund and Regular Savings Fund, a liquid fund, an ultra-short term debt fund and a credit opportunities fund respectively and ICICI Prudential Balanced Advantage Fund and Focused Bluechip a hybrid scheme and large cap scheme respectively.
Why this is happening
One reason for this could be the impending entry of e-Wallets like Paytm in the mutual fund market. Individuals usually hold small amounts in these wallets and any investments made through them are likely to be smaller than the minimum thresholds of Rs 1,000-5,000 that previously existed.
Another reason could be that mutual fund awareness is spreading among lower income earners and the fund house is simply eyeing the ‘fortune at the bottom of the pyramid’. These new investors are likely to start with relatively small amounts.
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