INSUBCONTINENT EXCLUSIVE:
Mutual fund industry managed to garner Rs 7,727 crore through systematic investment plans (SIPs) in September, a surge of 40 per cent from
the year-ago period, despite corrections in equity market.
With this, total SIP contribution in the first half of the current fiscal rose to
Rs 44,487 crore, compared to Rs 29,266 crore in April-September 2017, as per the Association of Mutual Funds in India (AMFI).
SIP continued
to be the preferred route for retail investors to invest in mutual fund as it helps them reduce market timing risk, the industry body
noted.
As per the latest data, the SIP contribution in September stood at Rs 7,727 crore, which was 40 per cent higher than Rs 5,516 crore
clocked in the same month last year.
In August, the industry collected Rs 7,658 crore and Rs 7,554 crore each in June and July.
The pace of
growth in fresh SIPs has slowed over the last three months as the SIP book grew by a little over 2 per cent in this period.
A sharp plunge
of more than six per cent in 30-share Sensex last month, triggered by the ILFS crisis, fall in the rupee and boiling crude oil prices, could
be the reason for this pace.
However, over the past few years, investment through SIPs has been rising as investments of over Rs 67,000
crore through the mode were seen in 2017-18 and more than Rs 43,900 crore in the preceding fiscal.
"There is a healthy trend and SIPs have
seen growth from strength to strength surviving markets volatility
This a good way for retail investors to manage market's ups and downs and it's encouraging that this trend continues," Edelweiss Asset
Management Company Chief Executive Radhika Gupta said.
According to Morningstar Director - Manager Research Kaustubh Belapurkar, Indian
investors are increasingly showing signs of maturity by recognising the fact that equity is a long term asset class and volatility is a part
Investors are in fact using market dips to top up their investments.
"We are witnessing a trend of increasing SIP numbers as industry
efforts towards investor education is getting more investors under the fold, who are acknowledging the power of the long-term wealth
creation potential offered by equity investing," he added.
Adhil Shetty, CEO of BankBazaar.com, believes that it is the right time to
continue with SIPs in equity funds rather than redeem investments
It gives investor a chance to add higher number of units in their portfolio.
"This surge in investment points towards an increase in
investor awareness about SIP, which is a good sign for the industry," he added.
Currently, mutual funds have 2.44 crore SIP accounts through
which investors regularly invest in Indian mutual fund schemes
In the current fiscal, the industry has added 10.17 lakh SIP accounts each month on an average, with average ticket size of Rs 3,165.
SIP is
an investment vehicle that allows investors to invest in small amount periodically instead of lump sum payment
The frequency of investment is usually weekly, monthly or quarterly
It is similar to a recurring deposit where investors deposit a small or fixed amount every month.
