Investor interest in the mutual fund industry as an avenue to generate long term wealth creation is rising with SIP’s asset base touching an all-time high of Rs 4.67 lakh crore at May-end.
Over the past five years, the systematic investment plan or SIP AUM has grown 30 per cent annually, twice as fast as the growth in the overall mutual fund industry’s assets under management (AUM).
According to data released by Association of Mutual Funds in India (Amfi) on Wednesday, SIP AUMs have seen a close to four-fold jump to Rs 4,67,366 crore as of May this year from Rs 1,25,394 crore as of August 2016.
The annual mutual fund SIP contribution too has seen a more than two-fold rise during the past five years to Rs 96,080 crore in 2020-21, from Rs 43,921 crore during 2016-17.
Also, monthly SIP contribution has witnessed a healthy growth of 2.52 times to Rs 8,819 crore as of May 2021, compared to Rs 3,497 crore in August 2016.
In the ongoing fiscal alone, for the first five months, SIPs have contributed Rs 42,148 crore.
Retail Investor interest towards mutual fund (MF) asset class has seen a meteoric rise as SIP accounts during the last five-year jumped almost four times to 3.88 crore in May 2021, from 1 crore as of April 2016.
The number of new SIPs registered on a month-on-month basis has seen an almost three-fold jump to 15.48 lakh as of May 31, 2021, from 5.88 lakh in April 2016.
“Increasingly, small savers have realised that with bank interest rates on a declining curve for last few years, inflation-adjusted superior qualitative returns over the longer term, could come only from the mutual fund asset class. Hence the rising affinity towards MF asset class, especially through the SIP route.
“Depending on their life-stage goals and risk appetite, small savers have been moving savings to mutual fund SIPs, away from bank deposits, as bank rates continue to witness a declining trend,” N S Venkatesh, Chief Executive, Amfi, said.
Systematic Investment Plan (SIP) is an investment methodology offered by mutual funds wherein an individual saver could invest a fixed amount in a chosen mutual fund scheme periodically at fixed intervals – say once a month instead of making a lump-sum investment.
The SIP instalment amount could be as small as Rs 500 per month.
SIPs have been gaining popularity among Indian savers, as it helps in rupee cost averaging and in investing in a disciplined manner without worrying about market volatility and timing the market, Amfi said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
