The total number of SIP accounts touched 7.63 crore in December 2023, out of which, 40.3 lakh were added in one month alone. It was for the first time that 40 lakh new SIP accounts were added in a month.
With an inflow of ₹17,610 crore into mutual fund SIP (Systematic Investment Plans) in the month of December 2023, total SIP AUMs have now topped ₹9.95 lakh crore.
Now, total number of outstanding SIP accounts have touched 7.63 crore, out of which, 40.3 lakh were added in December alone, reveals AMFI data. It was for the first time that 40 lakh new SIP accounts were added in a month.
In the preceding months of Oct and Nov, the new SIP accounts stood at 34.66 lakh and 30.8 lakh, respectively.
“Whenever the market does well, SIP numbers will naturally increase. Investors very well understood the importance of saving and investment during Covid. Now they are increasing their investment because their income has increased in the past couple of years. Besides, when salary increases, expenses do not increase proportionately. These are some of the reasons for considerable jump in the number of SIPs,” said Sridharan S, a Sebi-registered investment advisor and founder of Wealth Ladder Direct.
Too many investors are investing into mutual funds because of the ongoing bull run. Among retail investors, the preferred mode has traditionally been SIPs because of the convenience. Additionally, SIPs enable them to buy mutual fund units at different price points without having to worry over the right time to buy,” adds Sridharan.
Love for equity
One investment advisor MintGenie spoke to believes that the popularity of SIPs is an outcome of investors’ inclination for equity assets. Increasingly, investors have realised that equity is a great vehicle for the long-term wealth creation.
“SIP is a great tool to invest in a staggered manner allowing investors to invest small amounts periodically i.e. weekly, monthly or quarterly. Investors understand that mutual funds offer risk management better than direct equity. They also know that SIP provides the benefit of Rupee Cost Averaging. In the current scenario, India’s growth rate in terms of GDP is promising. India emerged as a strong economy in the turbulent time and geo-political tensions,” says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services.
Another expert asserts that the shift to SIPs stems from a growing trend of investors opting for financial assets over conventional assets.
“The substantial upswing in SIP investments can be attributed to a confluence of factors. Crucially, investors have now grasped that SIPs transform volatility from being their adversary into an ally. Their firsthand experience with substantial wealth creation in equities, achieved through disciplined investing via MF SIPs, has been instrumental in shaping this understanding. Operationally, SIPs offer significant convenience with features such as auto-debits, small ticket sizes, and the flexibility to choose the frequency of investments. Collectively, these aspects contribute to fostering an overall positive bias in investor behaviour,” says Deepak Gagrani, founder of Madhuban Finvest.
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