SIP continues to drive equity AUMs inflows

The Indian mutual fund industry is witnessing an unprecedented inflow of funds in the last couple of years. What is good from an equity market perspective is that equity funds are attracting more and more funds and they are increasing their overall share in the mutual fund industry. At the end of November 17, pure equity fund formed 29 per cent of the total AUM of industry compared to 25 per cent at the end of November 2016.  

Systematic investment plan (SIP) has become the preferred route for investing in the equity mutual fund.  Currently investment through SIP account forms almost one-third of entire investment in equity dedicated mutual fund schemes. SIP is like a recurring deposit where you deposit a fixed amount every month. According to the latest data from the Associations of Mutual Funds in India (AMFI), mutual fund industry in India had added on average of around 9.05 lakhs of SIP accounts each month in the first eight months of FY18. Currently, there are 1.8 crore SIP accounts. The average investment size through SIP is around Rs. 3,250 per SIP account.

Total investment through SIP in FY18 has already crossed Rs. 40,780 crore till November 2017, which is more than 90 per cent of what was achieved for the entire FY17. If investments continue with the current trend, we may see 40 per cent increase in investment through SIP in FY18 compared to FY17.

Monthwise Comparision of Inflows From SIP Accounts