AMFI’s latest data shows that SIP contribution of the Rs.23 lakh crore mutual fund industry has increased from Rs.67,190 crore to 92,693 crore, a growth of over 38% in just a year.
Also, the SIP AUM grew by Rs.68,077 crore in the last financial year from Rs.1.99 lakh crore in March 2018 to Rs. 2.67 lakh crore in March 2019. SIP AUM now accounts for 11% of the total industry AUM.
Gaurav Suri, Senior Executive Vice President & Head Marketing, UTI MF believes that several factors came together to drive the SIP success story. Demonetisation at the end of CY 2017, lower bank interest rates, financialisation of savings and AMFI’s ‘Mutual Funds Sahi Hai’ campaign have all contributed to generate interest in SIPs.
N.S. Venkatesh, AMFI CEO called SIPs the shining star of the MF industry in a recent press conference. Retail investors have shown immense maturity and discipline by continuing their SIP investments despite market volatility, he said.
On a more subdued note, the growth in the number of SIP accounts declined in FY 18-19 compared to FY 17-18. While FY 17-18 had 30% SIP closure (No. of SIPs discontinued/No. of new SIP registered), FY 18-19 saw 54% SIP closure.
Akhil Chaturvedi, Associate Director-Head-Sales & Distribution, Motilal Oswal MF believes that increase in SIP closure is a result of market uncertainty. He feels that the scale of flows is influenced by market direction. According to him, the current trend may continue for a few more months but SIP flows will normalise once markets stabilise. He said that investors should remember that SIP is a tool for averaging units. In the accumulation phase, a low market level allows investors to accumulate more units. Therefore, it is better if markets are low in the accumulation phase and high in the sale phase.
D.P. Singh, ED & CMO (Domestic) SBI MF said that analysis of SIP data shows that closure is higher among direct investors compared to regular plan investors as there is no one to hand-hold them through volatile markets. He also shared that previously many major banks recommended 1-2 year SIPs. This trend is now changing to perpetual SIPs, which will lead to lower closures in the coming years.
SIP Trend
|
Month |
Total No. of outstanding SIP Accounts (Lakh) |
No. of new SIPs registered (Lakh) |
No. of SIPs discontinued (Lakh) |
SIP AUM Rs. crore |
SIP Contribution Rs. crore |
|
Apr 18-Mar 19 |
262.25 |
109.54 |
58.75 |
2,66,815 |
92,693 |
|
Mar 19 |
262.25 |
8.87 |
5.76 |
2,66,815 |
8,055 |
|
Feb 19 |
259.14 |
7.54 |
4.96 |
2,43,539 |
8,095 |
|
Jan 19 |
256.56 |
7.97 |
5.36 |
2,39,595 |
8,064 |
|
Dec 18 |
253.95 |
7.23 |
5.36 |
2,40,147 |
8,022 |
|
Nov 18 |
252.08 |
7.58 |
4.44 |
2,31,279 |
7,985 |
|
Oct 18 |
248.94 |
9.35 |
4.66 |
2,17,818 |
7,985 |
|
Sep 18 |
244.25 |
10.64 |
4.79 |
2,17,621 |
7,727 |
|
Aug 18 |
238.40 |
10.70 |
4.82 |
2,32,167 |
7,658 |
|
July 18 |
232.52 |
10.16 |
6.26 |
2,19,884 |
7,554 |
|
June 18 |
228.62 |
10.34 |
4.52 |
2,05,650 |
7,554 |
|
May 18 |
222.80 |
10.36 |
3.83 |
2,14,064 |
7,304 |
|
Apr 18 |
216.27 |
8.80 |
3.99 |
2,14,302 |
6,690 |
|
Apr 17-Mar 18 |
211.46 |
116.41 |
34.83 |
1,98,738 |
67,190 |
