What is Axis Mutual Fund's Shagun SIP?
Axis Mutual Fund has rolled out Shagun SIP, a novel digital investment feature designed to help investors accumulate precious metals like gold and silver. Unlike conventional Systematic Investment Plans (SIPs) that require a fixed monthly rupee commitment, Shagun SIP allows individuals to set a target quantity of gold or silver in grams over a specified period.
This feature is available for those investing in the Axis Gold Fund and Axis Silver Fund of Fund, providing a structured way to build exposure to these assets without the complexities of physical storage.
How Does Shagun SIP Work?
The core innovation of Shagun SIP lies in its gram-based targeting. An investor first determines the total quantity of gold or silver they wish to accumulate (e.g., 5 kg of gold) and the desired investment timeframe (e.g., 10 years). The system then calculates the periodic investment amount based on the prevailing market price of the chosen metal.
Dynamic Investment Amounts: A key difference from traditional SIPs is that the monthly rupee investment amount is not static. If gold or silver prices increase, the required investment to achieve the gram target may rise. Conversely, if prices fall, the monthly contribution could decrease. The ultimate goal, however, remains fixed on the chosen quantity of metal.
No Physical Gold Involved
It's important to note that Shagun SIP investments do not involve the direct purchase or storage of physical gold or silver by the investor. Instead, the investments are channeled through Axis Mutual Fund's existing gold and silver fund structures. These underlying schemes invest in high-purity metals (99.5% purity for gold and 99.9% purity for silver), offering investors exposure without concerns about physical storage, security, or purity verification.
The feature supports substantial accumulation targets, allowing investors to aim for up to 25 kg of gold or 50 kg of silver.
Dynamic, Not Static
While Shagun SIP maintains a systematic investment approach, its contribution mechanism is dynamic. By spreading purchases across various market price levels, investors can potentially average out their acquisition cost over the investment period. However, market risks are not eliminated, and the total amount required to reach the gram target will fluctuate with precious metal prices.
Boniface Noronha, Chief Digital Officer at Axis Mutual Fund, highlighted the significance of this offering:
"Gold and silver remain important asset classes for Indian investors, accumulated steadily over time. Shagun SIP offers a fully digital, goal-based experience for investors looking to build gold and silver holdings systematically over the long term."
This digital feature is accessible via the Axis Mutual Fund website, providing a convenient and flexible option for planning long-term precious metal accumulation based on quantity rather than a fixed rupee commitment, suitable for goals like marriage, education, or wealth preservation.