The high market volatility failed to dampen SIP investors’ sentiment during the last fiscal year. The Mutual Fund industry saw retail investors pumping in over Rs 1.56 lakh crore through systematic investment plan or SIP route last fiscal, showing a rise of 25 percent over the previous financial year.
Retail investors poured in Rs 1.24 lakh crore in 2021-22, Rs 96,080 crore in 2020-2021 through SIP, the latest Association of Mutual Funds in India (Amfi) data showed.
Over the last seven years, mutual fund SIP contribution has grown by about four times. MF SIP inflows were recorded at Rs 43,921 crore in FY2017.
Also, the SIP book has been growing consistently. In March 2022, the SIP contribution stood at Rs 12,328 crore to an all-time high of Rs 14,276 crore in March 2023, showing a growth of 16 per cent.
For FY23, SIP inflows averaged nearly Rs 13,000 crore flows per month, helping investors benefit from rupee cost averaging.
This steady inflows assume significance as it has come at a time when FPIs were seen leaving Indian market.
SIPs’ assets under management rose 18 percent to Rs 6.83 lakh crore at the end of March this year from Rs 5.76 lakh crore in March-end 2022.
Also, the SIP performance decoupled from the equity market return in the last one year as retail investors continue to invest by SIPs despite extreme volatility in the market.
“SIP inflows for FY23 stood at Rs 1.56 lakh crore, a growth of 25.2 per cent on a year-on-year basis, with the highest-ever inflow in March at Rs 14,276 crore. With benchmark indices remaining volatile and flat for the year, investors choose mutual funds as the preferred route for investments, reposing faith in the Indian stock market,” Gopal Kavalireddi, Head of Research at FYERS, was quoted as saying in a PTI report.
According to Amfi, SIPs have been gaining popularity among Indian savers, as it helps in rupee cost averaging and investing
in a disciplined manner without worrying about market volatility or timing the market.
Mutual funds have about 6.36 crore SIP accounts through which investors regularly invest in mutual fund schemes.
The 42-player mutual fund industry mainly depends on SIPs for inflows, with equity mutual funds attracting Rs 1.46 lakh
crore in the financial year ended March 31, 2023.