Year 2020 has started on a positive note for the MF industry. Net SIPs in the MF industry has risen to a 20-month high of 6.12 lakh in January. Net SIPs is new SIP registered minus ceased SIPs.
The increase in net SIPs was due to a sharp rise in new registered SIPs, which outdid the marginal increase in ceased SIPs.
In January, the number of new SIPs registered surged to 12.07 lakh, a record high for the MF industry. Meanwhile number of SIPs ceased, which includes discontinued and completed SIP accounts, touched 5.95 lakh.
Industry experts attribute this rise in net SIPs to improved sentiments amid hopes of broad-based market recovery, rising popularity of SIPs and increase in number of online MF platforms.
IFA Sadashiv Phene said that investors are hopeful that the mid and small cap funds will deliver attractive returns in medium term. This optimism of a broad-based market recovery has prompted investors to start new SIPs in these funds.
Moreover, increase in number of online mutual fund platforms has also led to a surge in new SIPs as they offer operational convenience and cost effective investment optiond.
Virendra Ranawat, Co-Founder of MySipOnline says, “Investment apps have managed to provide access to a large number of retail investors across India, as they are cost effective and easy to use,” he said.
Swarup Mohanty, CEO, Mirae Asset MF believes that SIP as a concept has gained traction. Now, increasing number of investors and advisors prefer SIPs to lump sum investment.
Vishal Kapoor, CEO, IDFC MF said that advisors and investors are finding SIP as a convenient method for investment. In addition, good experience of existing SIP investors has helped in making SIPs more popular.
Meanwhile, the number of ceased SIPs also witnessed an increase. Experts attribute this to disappointment and lack of patience among investors, as many funds have underperformed in the past two three years; especially those investors who started SIPs through direct plans redeemed their investment when the markets turned volatile.
