SIP inflows register decline in March, folios rise in April

The inflows into systematic investment plans or better known as SIPs fell to Rs 8,376.11 crore compared to Rs 8,641.20 crore in March 2020.

However, the month of April saw an addition in number of SIP folios. The industry added  1,93,761 accounts taking the total number of folio count to 3.13 lakh crore.

"Despite subdued economic scenario, retail investors are seen to be continuing with their goal-based investment discipline, displaying mature investment conduct, as seen from month-on-month rise in retail AUMs, as also marked rise in the number of SIP accounts," said NS Venkatesh, Chief Executive, AMFI.

In April, SIP AUMs stood at Rs 2.75 lakh crore, up by Rs 36,096.75 crores from March 2020.

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.

SIP helps the investor average his cost over a period of time, fetching more units when prices are low and fewer units when prices are high.