MF inflows through SIPs set to hit new high in FY24

Notwithstanding the concerns over froth and bubbles building up in the stock markets, the inflows through Systematic Investment Plans are all set to hit a record high this fiscal, and in the last 11 months, it has already surpassed the amount collected in FY23.

The SIP inflows were up 15 percent in the last 11 months at ₹1.80 lakh crore against ₹1.56 lakh crore logged in the same period last fiscal. With the exception of June, the SIP inflows have consistently increased every month to the record high of ₹19,187 crore in February.

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SIPs continue to remain the mainstream of investments in MF equity schemes with inflows through SIP at ₹38,025 crore in the last two months, accounting for 78 percent of the overall equity schemes’ inflow of ₹48,645 crore.

The number of outstanding SIP accounts increased 29 percent as of last month-end to 8.20 crore against 6.36 crore as of FY23 end. The new accounts opened so far in this fiscal were up 53 percent at 3.85 crore against 2.51 crore logged in the last fiscal. However, the discontinuation of SIP also increased to 40 percent to 2.01 crore against 1.43 crore in the same period as the high market valuation remained a major concern among investors.

The bellwether Sensex has rallied 19 percent to 72,500 points against 61,112 points in April on expectations of strong economic growth despite uncertainty in the global markets.

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Ashwini Kumar, Head (Market Data), ICRA Analytics, said the industry has witnessed a significant surge in retail participation, with individual investors accounting for over 60 percent of the total AUM.

The increasing retail participation is also reflected in the SIP numbers, with the total number of SIP accounts increasing to 8.20 crore last month, and the amount collected through SIP stood at ₹19,187 crore.

Manish Mehta, National Head (Sales, Marketing & Digital Business), Kotak Mahindra AMC, said first-time investors continue to use SIP to begin their mutual fund journey while other investors are accumulating units at market dips, helping to enhance overall portfolio returns.