As markets turn volatile, Indian investors are increasingly choosing the path of systematic investment plans (SIPs). December SIP inflows into mutual funds increased to Rs 13,573 crore from Rs 13,307 crore in November, the third consecutive month-on-month increase in 2022. The total number of mutual fund folios as of December 31, 2022 stood at 14.11 crore.
According to data released by Association of Mutual Funds in India (AMFI), equity mutual funds saw inflows worth Rs 7,280 crore in December, a marked month-on-month jump from from November when the category saw inflows worth Rs 2,224 crore. The growth is encouraging as it show that more investors are taking a disciplined approach to equity investing.
“Given the market volatility, investors continue to show maturity in their investment behaviour by continuing their SIP investment. When markets are high, the industry sees SIP less redemptions and at lower market levels, it is SIPs plus additional purchase,” said Manish Mehta, Head – Sales, Marketing and Digital Business, Kotak Mahindra Asset Management Company Ltd.
The development also augurs well for mutual fund industry, which stood at Rs 40.38 lakh crore as on November 30, 2022. The industry has grown over 5 times since November 2012, when it stood at Rs 7.93 lakh crore.
The assets under management (AUM) of the industry almost doubled in just five years from Rs 22.79 lakh crore as on November 30, 2017 to Rs 40.38 lakh core as on November 2022. The number of investor folios has gone up from 6.49 crore folios as on November 30, 2017 to 13.98 crore as on 30-Nov-2022, more than 2 fold increase in a span of 5 years.
On an average 12.47 lakh new folios are added every month in the last 5 years since November 2017, according to AMFI.
AMFI attributes the growth to regulatory measures taken by Securities & Exchange Board of India (Sebi) and increase in number of mutual of fund distributors.
Distributors have led a huge role in providing the last mile connectivity to the industry to reach retail investors in tier-2 and tier-3 cities.
In April 2016, the number of SIP accounts crossed 1 crore mark and as on November 30, 2022 the total number of SIP accounts are 6.05 crore.