Amid a sustained inflow from retail investors, the share of mutual funds linked to systematic investment planning (SIP) in the total assets under management (AUM) of the industry reached a record 17% in January, according to the Association of the Mutual Funds in India (AMFI). This compares with the long-term average of 11.5%.
AUM of SIP funds at Rs 6.7 lakh crore at the end of January was just 1.7% lower than the peak value about two month ago. In contrast, the total market capitalisation of India slipped by over 14% from the peak in January 2022. This shows the unabated momentum in SIP inflow. It touched a record high of Rs 13,856 crore in January 2023, the fifth consecutive period of month-on-month growth.
The 12-month rolling cumulative inflow from SIP linked funds crossed Rs 1.5 lakh crore for the first time in January. According to industry experts, nearly 90% SIP accounts are deployed in equity funds. It partially offset the redemption pressure from foreign investors, who sold Rs 1.2 lakh crore worth of Indian equities over the past 12 months.
SIP AUM rose by 26.6% annually in the past five years on an annual increase of 25.7% and 15.8% in SIP accounts monthly SIP inflow. Overall mutual fund AUM gained by 12.1% annually in the said period.
Total SIP accounts reached 6.2 crore at the end of January reporting a gross addition of more than 20 lakh in the past three months compared with the long-term average of 12 lakh.
The average ticket size of SIP investment was at Rs 2,229 per account in January 2023. It has stabilised over the past three months after a consistent decline in the previous few months, largely because of the incremental accounts on a few digital platforms which offered SIP investment of as low as Rs 500 per month.