SIPs continue to remain the favourite option for retail investors to invest in mutual funds.
AMFI’s latest data shows that the industry mopped up close to Rs44,000 in FY 2016-17 through SIPs. In fact, the monthly inflows in mutual funds through SIPs reached an all-time high at Rs4,355 crore in March 2017. In April 2016, the industry received Rs3,122 crore through SIPs.
Another good news for the MF industry is increase in the average ticket size of SIP. The average ticket size of SIP has grown from Rs2,500 in July 2016 to Rs3,200 in March 2017.
In terms of SIP accounts, the industry had 1.35 crore active SIP accounts in March 2017 compared to 98.57 lakh in the corresponding period last year. On an average, AMFI data shows, the MF industry has been adding about 6.26 lakh SIP accounts each month.
Experts attribute this growth to increasing investor awareness and good performance of equity schemes.
Swarup Mohanty, CEO, Mirae Asset, believes, “Though SIPs were introduced around 25 years ago, they have been gaining popularity among retail investors only recently. IFAs usually advise SIPs to investors due to ease of investment in mutual funds. As a result, inflows in mutual funds through SIPs increased from Rs2,000 crore to Rs4,300 crore on a monthly basis in just two years. In my view, inflows will touch Rs8,000 crore in the next couple of years.”
Radhika Gupta, CEO, Edelweiss Mutual Fund, endorses the Mirae Asset CEO’s views. “SIPs continue to be a key contributor to the MF industry’s assets. The favourable market condition and growing awareness has increased the popularity of SIP among retail investors. Investing through SIPs gives multiple benefits to investors like diversion of risk; it tides over market volatility, and so on. SIPs are continuously gaining popularity as these suit all types of investors,” she says.
SIP has been gaining popularity among Indian MF investors, as it helps in Rupee Cost Averaging, and in investing in a disciplined manner without worrying about market volatility and timing the market. SEBI Investor Survey (SIS) 2015 says that six out of 10 investors prefer investing in mutual funds through SIP.