Analysis of the latest AMFI data shows that over 61% of the SIP accounts have been active for more than five years.
Of the 2.62 crore SIP accounts in the industry at the end of March 2019, 1.6 crore SIP accounts have been active for more than five years.
Experts attribute this to the untiring efforts of advisors and financial planners in promoting goal based investing. IFAs advise clients they invest systematically towards their goal to minimise risk. Moreover, the perpetual SIP option introduced by fund houses also nudges investors to continue investing for longer periods.
Meanwhile, 32 lakh SIP accounts have been active for less than a year. Considering that 2018 was a volatile year for both equity and debt markets, investors may have decided to pause their investments till after the elections.
SIP accounts longevity
|
SIP accounts continuing for |
Total no. of SIP accounts |
Proportion |
|
> 5 years |
15976828 |
61% |
|
> 4 years up to 5 years |
1404984 |
5% |
|
> 3 years up to 4 years |
1181333 |
5% |
|
> 2 years up to 3 years |
2454207 |
9% |
|
> 1 year up to 2 years |
1992831 |
8% |
|
<1 year |
3215038 |
12% |
|
Total |
26225221 |
100% |
Source: AMFI
The data also shows that advisors are driving the SIP story; 89% of the industry’s SIP accounts come in regular plans. Of the 2.62 crore SIP accounts only 29.567 lakh came through the direct route. Similarly, 90% of the industry’s SIP AUM (Rs.2.4 lakh crore) comes through regular plans. Considering that direct plan numbers also include RIA activated SIPs we can say that advisors have played a crucial role in getting investors to take the SIP route.
Direct vs regular SIPs
|
Direct plan |
Regular plan |
Total |
|
|
SIP accounts |
2,956,500 |
23,268,721 |
26,225,221 |
|
Proportion |
11% |
89% |
100% |
Source: AMFI
