Investments through systematic investment plans (SIPs) in India surpassed ₹25,000 crore for the second consecutive month, underscoring the growing preference for disciplined mutual fund investments. According to data from the Association for Mutual Funds in India (AMFI), SIP inflows in November stood at ₹25,320 crore, marginally close to October’s historic figure of ₹25,323 crore.
Mutual fund AUM witnesses steady growth
The mutual fund industry’s total assets under management (AUM) increased to ₹68.08 lakh crore in November, up from ₹67.25 lakh crore in October. The steady rise in AUM reflects robust investor confidence in mutual funds as a long-term wealth creation tool.
October marked a significant milestone when SIP investments crossed the ₹25,000 crore threshold for the first time in India, a testament to the increasing popularity of SIPs among retail investors.
Surge in direct SIP plans
The preference for direct SIP plans has surged over the years. Direct SIP accounts now make up nearly 40% of the total, compared to 21% four years ago. Industry data reveals that the AUM linked to direct SIPs rose to ₹2.7 lakh crore by October 2024, a significant jump from ₹29,340 crore in March 2020. During this period, the share of direct SIPs in total AUM increased by 12.2%, reaching 20.3%.
Record-breaking SIP accounts
The number of SIP accounts reached an all-time high of 10.12 crore in October, up from 9.87 crore in September. This remarkable growth indicates a widespread adoption of systematic investing among Indian investors.
Macroeconomic factors influence investor behavior
Akhil Chaturvedi, Executive Director and Chief Business Officer at Motilal Oswal AMC, noted that heightened market volatility, geopolitical events, and the US election results influenced investor behavior. “This resulted in investors opting for a wait-and-watch approach while allocating larger amounts and thus decline in lumpsum flows, including flattish SIP numbers for November,” he said.
Growth in ELSS, Small-Cap, and Mid-Cap funds
Equity-Linked Savings Schemes (ELSS) saw inflows rise sharply to ₹618.5 crore in November, up from ₹362 crore in October. Small-cap funds experienced a 9% increase, with inflows growing from ₹3,772 crore in October to ₹4,112 crore in November. Mid-cap funds also registered growth, climbing 4.3% to ₹4,883.4 crore in November from ₹4,683 crore the previous month.
