It is raining SIPs

The MF industry sees a steep growth in SIPs with five AMCs alone being able to generate nearly seven lakh new SIPs in just four months

Mumbai: Personal finance gurus have always recommended SIPs as a smart way to invest in mutual funds. It seems investors too agree. In the last four months it has been a merry time for the industry in terms of SIPs as the numbers have gone up drastically. Most fund houses have seen a steep growth in SIP subscriptions and expect the trend to continue.

Over the last four months, UTI Mutual Fund was able to generate 1.25 lakh SIPs and plans to generate 10 lakh SIPs in this current fiscal. A UTI official said that SIP has been accepted well by investors as they see it as an easy and convenient way to invest in mutual funds.   

Reliance Mutual Fund sees a big opportunity in this space and therefore has started insuring SIPs (read here: Seven more Reliance schemes to provide insurance via SIPs). The AMC was able to generate 2.89 lakh SIPs in a span of four months (March 11- June 11).

“We believe the SIP market will expand in a big way. As a value addition, we have also started offering insured SIP. Last year, we were able to generate 20 lakh SIPs and this year we plan to grow the numbers by 40%”, said Himanshu Vyapak, Executive Vice President, Reliance Mutual Fund.

DSP BlackRock Mutual Fund is generating 18 – 19 thousand SIPs every month while Axis AMC has successfully generated 1.50 lakh SIPs by closely working with its banking channel. It plans to add another 40,000 by the end of August. “We are working very closely with Axis Bank to increase our SIP numbers,” said Karan Dutta, National Sales Head, Axis MF. 

Baroda Pioneer MF has also reported increasing numbers in SIP. “Currently, our focus is on SIPs. In the last three months, we generated 10,000 SIPs.  That’s the rate we would like to sustain,” said Rajan Krishnan, Managing Director, Baroda Pioneer Mutual Fund. 

The industry experts also pointed out that investors are favoring top up on SIPs rather than starting a new SIP.  According to data provided by Karvy, there are 25.36 lakh active SIPs currently with their client AMCs.  During the current fiscal, the RTA’s clients witnessed 4.40 lakh new SIPs between April to June against 2.46 lakh SIPs in the last fiscal during the same period. Similarly, the number of new SIPs with Karvy AMCs in the last six months was 7.64 lakh. 

Do you also feel SIP trend will sustain? Do let us know.