In the current financial year (2019-2020), the total inflows through SIPs stood at Rs 82,929 crore, according to AMFI CEO NS Venkatesh.
The assets under management (AUM) of mutual fund companies that has come through systematic investment plans (SIPs) touched Rs 3.24 lakh crore in January, an increase of Rs 7,846 crore from a month ago, according to data from Association of Mutual Funds in India (AMFI).
In the current financial year (2019-2020), the total inflows through SIPs stood at Rs 82,929 crore, AMFI CEO NS Venkatesh said.
Currently, mutual funds have about 3.03 crore SIP folios through which investors regularly invest in schemes.
In January, the mutual fund industry saw 12.07 lakh new SIP folios added, while 5.95 lakh SIP accounts were closed or matured.
AMFI data shows that the MF industry had added, on average, 9.55 lakh SIP accounts each month during FY2019-20, with an average SIP size of about Rs 2,850 per account.
"The growing retail monthly SIP contribution is a thumping recognition of the retail investor acceptance of mutual funds as an avenue for long term wealth creation despite the market volatility," Venkatesh said.
Fund managers were also of the view that growing SIP AUM numbers could be attributed to savvy investors who are sticking to their long term SIPs.
"Retail investors may continue investing in the markets through SIPs, while staying balanced in their investing approach between different asset classes," said Sundeep Sikka, ED and CEO, Nippon Life India Asset Management.
Overall, the AUM of the mutual fund industry rose to 27.85 lakh crore in January as against 26.54 lakh crore a month ago.
What is an SIP?
SIP is an investment method offered by mutual funds through which one could invest a fixed amount in a mutual fund scheme periodically at fixed intervals - say once a month -- instead of making a lump-sum investment.
An SIP installment amount can be as small as Rs 500 per month. SIP is similar to a recurring deposit where you deposit a small/fixed amount every month.
It is a very convenient method of investing in mutual funds through standing instructions to debit your bank account every month, without the hassle of having to write out a cheque each time.
SIP has been gaining popularity among Indian MF investors, as it helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.
SIPs help the investor average his cost over a period of time, fetching more units when prices are low and fewer units when prices are high.Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.
