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An analysis of industry data reveals that out of the total SIP AUM of Rs.8 lakh crore, Rs.2 lakh crore AUM has been invested for over 5 years.
In terms of SIP accounts, 81 lakh SIP accounts have been active for more than 5 years, which accounts for 12% of the total number of SIP accounts.
Ajit Menon, CEO of PGIM India Mutual Fund, believes that the number of long-term SIP investors could have been better if investors had invested with their financial goals in mind. He suggests that the mutual fund industry should focus on offering solutions like retirement to encourage long-term SIP investments.
Rajkot MFD Ramkumar Barchha says that many new investors who start SIPs based on the advice of financial influencers and social media content tend to exit prematurely due to market volatility.
Further analysis of the data shows that a significant portion, 38% of the total SIP AUM, has been invested recently. Specifically, 2.53 lakh crore of SIP AUM has a longevity of less than a year.
For more detailed information on the longevity of SIP AUM and SIP accounts, please refer to the table below
|
SIP accounts continuing |
Total SIP |
% SIP accounts |
Total AUM (Cr) |
AUM % |
|
> 5years |
80,76,235 |
12% |
1,99,783 |
25% |
|
> 4 years upto 5 years |
48,69,096 |
7% |
83,560 |
11% |
|
> 3 years upto 4 years |
45,20,552 |
7% |
97,711 |
12% |
|
> 2 years upto 3 years |
80,23,063 |
12% |
1,02,211 |
13% |
|
> 1 year upto 2 years |
1,57,09,198 |
24% |
1,32,316 |
17% |
|
Less than < 1 year |
2,53,38,889 |
38% |
1,78,026 |
22% |
|
Total |
6,65,37,033 |
100% |
7,93,609 |
100% |
SIP longevity in T-30 Vs B-30 cities
As of June 2023, T-30 cities account for Rs.5 lakh crore (63%) of the total SIP AUM of Rs.8 lakh crore, while B-30 cities account for Rs.3 lakh crore (37%).
The data further reveals that 25% of the total SIP AUM in T-30 cities and in B-30 cities have been active for over 5 years.
Let’s look at the table to know more about geographical spread of SIP AUM and accounts in T30 and B30 cities:
|
SIP accounts |
T-30 |
B-30 |
||||||
|
No of SIP |
% SIP |
AUM(Cr) |
%AUM |
No of SIP |
% SIP |
AUM(Cr) |
%AUM |
|
|
> 5years |
39,95,972.00 |
12% |
1,32,471.34 |
25% |
40,80,263 |
12% |
67,312.11 |
25% |
|
> 4 years upto 5 years |
23,61,513.00 |
7% |
55,966.94 |
11% |
25,07,583 |
8% |
27,593.33 |
10% |
|
> 3 years upto 4 years |
22,01,948.00 |
7% |
65,234.50 |
12% |
23,18,604 |
7% |
32,476.94 |
12% |
|
> 2 years upto 3 years |
39,18,147.00 |
12% |
67,185.69 |
13% |
41,04,916 |
12% |
35,025.56 |
13% |
|
> 1 year upto 2 years |
77,24,033.00 |
23% |
86,664.77 |
16% |
79,85,165 |
24% |
45,651.56 |
17% |
|
Less than < 1 year |
1,31,78,429.00 |
39% |
1,17,795.32 |
22% |
1,21,60,460 |
37% |
60,230.74 |
22% |
|
Total |
3,33,80,042.00 |
100% |
5,25,318.56 |
100% |
3,31,56,991 |
100% |
2,68,290.24 |
100% |
