SIP flows over Rs. 8,000 crore for seven months in a row

SIP inflows for the month of June 2019 stood at Rs. 8,122 crore. This makes June the seventh consecutive month in which SIP inflows were above Rs. 8000 crore.

The first quarter of FY 19-20 started with a bang with SIP inflows touching an all-time high of Rs. 8,238 crore in April. However, the following months saw flows decline marginally. Even though there was no uptick in SIP numbers, the industry continued to add SIP accounts to its kitty. Vishal Kapoor, CEO, IDFC MF shared that 3.88 lakh live SIP accounts were added last month taking the total SIP folio count to 2.73 crore in June. Overall, SIP accounts grew by 12 lakh last quarter.

While the near term trend in SIP inflows seems to be flat, the broad trend is quite encouraging. On a year-on-year basis, SIP inflows have grown by 14%. Experts believe that the sustained inflows in SIPs indicate that retail investors continue to repose their faith in equity funds through the SIP route.

Over the last few years, SIPs have become popular as a tool to invest in equity funds. In FY 16-17, total SIP inflows during the financial year were Rs. 43,921 crore. In the succeeding two years, the inflows more than doubled to Rs. 92,693 crore (FY 2018-19). So far, the SIP story seems to hold strong with total inflows during first quarter of this financial year at Rs. 24,543 crore (26% of the total inflows in FY 18-19).

Experts believe that distributors have been instrumental in promoting and popularising SIPs among investors by educating retail clients through IAPs and conducting SIP drives. Historical data shows that in March 2019, 88% of the SIP contribution came from regular plans, a testimony to the hard work and dedication of the distributor community.

SIP contribution Rs. crore

Source: AMFI