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SIP contributions touch all-time high in October — experts discuss key reasons

AMFI data | The equity mutual funds inflows dropped month on month to Rs 9,390 in October. The net flows stood at Rs 14,077 crore in September. Here's how SIP contributions fared in the month

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By Anshul  Nov 11, 2022 4:19:33 PM IST (Updated)

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SIP contributions touch all-time high in October — experts discuss key reasons
The monthly contribution into Systematic Investment Plans (SIPs) touched an all-time high of Rs 13,041 crore in October as compared to Rs 12,976 crore in September, according to the data released by the Association of Mutual Funds in India (AMFI). The mutual fund SIP accounts went up to 5.93 crores as of October 31, 2022, compared to 5.83 crores as of September 30, 2022.

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The inflows through SIPs have been above the Rs 12,000-crore mark since May. It was at Rs 12,140 crore in July, Rs 12,276 crore in June and Rs 12,286 crore in May. Before that, it was at Rs 11,863 crore in April.
So, what is the reason for the rise?
The increase in the amount of SIP collected shows that retail investors are taking a disciplined approach to their mutual fund investment.
"Markets continue to react to global factors and domestic rate hikes. However, mutual fund investors have shown resilience and continue to invest in SIPs, with consistent contribution month on month," NS Venkatesh, chief executive of AMFI, said.
According to Akhil Chaturvedi, Chief Business Officer, Motilal Oswal Asset Management Company, SIP contribution and folios are positive, reflecting the investors' faith in the Indian economy and markets.
“It also re-affirms the trend of financialisation of household savings even in the face of persistent concerns on the global macro front. Indian economy’s global resilience during these troubled times is also helping,” he said.
The global environment remains volatile, driven largely by multiple factors, including the geopolitical instability in Europe, the slowdown in China, and the rising inflation in the US.
Priya Agrawal, Money Coach at LXME (neo-bank for women), believes that
investors are putting their money in equity-oriented schemes to generate inflation-beating returns in the long run.
Also, this is likely indicative of investors' preference for investing during market dips. The overall positive sentiment is also likely driven by investors' interest in investing in the NFOs launched in the month.
Month-wise amounts collected from FY16-17 are mentioned below:
Month SIP contribution in crore
 FY 2022-23FY 2021-22FY 2020-21FY 2019-20FY 2018-19FY 2017-18FY 2016-17
Total during FY87,2751,24,56696,0801,00,08492,69367,19043,921
December 11,3058,4188,5188,0226,2223,973
September12,976 10,3517,7888,2637,7275,5163,698
August12,693 9,9237,7928,2317,6585,2063,497
July12,140 9,6097,8318,3247,5544,9473,334
Jun12,276 9,1567,9178,1227,5544,7443,310
May12,286 8,8198,1238,1837,3044,5843,189
(Source: AMFI)
Details of new SIPs registered and discontinued during FY22-23: (SIP count in lakh)
MonthNumber of outstanding SIP accountsNew SIPs registeredSIPs discontinued/ tenure completedSIP AUMRs croreSIP contributionRs crore
Apr 22 – Oct 22593.30141.4475.876,64,78187,275
Oct 22593.3019.7310.206,64,78113,041
Sep 22 583.7723.6611.506,35,28612,976
Aug 22 571.6121.1311.466,39,78712,693
Jul 22561.94 17.4210.376,09,29612,140
Jun 22554.89 17.9311.455,51,18912,276
May 22 548.41 19.7510.365,65,70612,286
Apr 22  539.02  21.82 10.535,78,08611,863
Apr 21– Mar 22527.73266.36111.175,76,3581,24,566
(Source: AMFI)
All about SIP
SIP is an investment plan (methodology) offered by Mutual Funds wherein one could invest a fixed amount in a mutual fund scheme periodically at fixed intervals — say once a month instead of making a lump-sum investment.
The SIP instalment amount can be as small as Rs 500 per month.
SIP has been gaining popularity among Indian MF investors, as it helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.
The rupee cost-averaging feature of SIP allows investors to buy more units of a mutual fund when the market is low and reduce the per-unit investment cost.

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