4.5L SIPs added to MF kitty this year

Markets might have been in a state of turmoil for the last few months, but it seems that nothing unnerves mutual fund investors. Nearly 4.5 lakh Systematic Investment Plans or SIPs were added to the mutual fund kitty early this year, at the time when the Indian capital markets witnessed their biggest quantum fall.

SIP by SIP is the way to go for mutual fund investors and it seems market volatility doesn't have much of bearing. Between September to December 2007, when the markets were on its fastest upside, the industry added 2 lakh SIPs.

But contrastingly, in the first three months of this year, when heightened volatility loomed over the Indian stock markets, four and a half lakh SIPs were added. The total number of SIPs now stands at a whopping 2.9 million.

Madhusudan Kela, CIO, Reliance MF said, “I think we have had a 3-5 year bull run which is bearing on the investor's mind. Many have realized corrections of this nature can possibly be a good entry.”

Sanjay Sinha, CIO, SBI MF said, “Unlike the falls that we saw in May 2004 and  May 2006, in which the investors chose to go away from the funds or not come in at all, in this fall since January, we have actually seen money coming into almost all our funds. This is a very significant development and if this sustains we are going to see retail participation far more than what it has been in last  three years."

What's more, in the same volatile period early this year, 75 lakh new folios were created as  compared to the quarter before, that saw just 26 lakh folios coming in. The number of SIPs is growing at a healthy 42% YoY. And it's not just the top 20 urban centres that are contributing to this growth. Experts say, as the reach widens across the country with more number of players stepping in, investors from smaller towns are also increasingly participating. This perhaps may be a sign of more maturity amongst investors.

By Pooja Meswani, CNBC-TV18