The SIP debate continues: SIPs offer stability amid market ups and downs, says this investment officer

The SIP debate continues: There will be ups and downs but stay invested, says Mahesh Patil of Aditya Birla Sun Life MF

The storm around SIPs (systematic investment plans) especially focused on small- and mid-cap stocks, triggered by comments by ICICI Prudential AMC’s Chief Investment Officer S Naren has attracted a lot of reactions from marquee names from the mutual fund industry.

Last week, while speaking at IFA Galaxy 2025, an event organised by a Chennai-based mutual fund association, Naren advised caution regarding SIP investments in mid-and small-cap stocks. “We think it is a clear time to take out lock, stock, and barrel from small- and mid-caps,” he said.

Meanwhile, in the latest instance, Mahesh Patil, CIO of Aditya Birla Sun Life AMC, has said that SIPs with long-term commitment are one of the best defence against the ongoing heightened market volatility.

"There will be ups and downs, but if you stay invested and keep putting in, it can give you long-term income, growth, and savings," Patil said while speaking at Axis Capital’s India Conference.

He, however, added that historically investors tend to enter the market during periods of optimism when markets are on an upward trajectory, only to panic and withdraw when markets dip.

"Normally, we see that investors come in when the market is peaking. Then when the market goes down, there is a kind of spillover, and things start to go down… Fortunately, I think, in the last 3-4 years, the market has also been kind of a secular movement,” he said.

Even so, he believes that SIPs still offer a solid route for investors who stick to their plans and maintain long-term discipline. “The experience has been good, and that has reinforced the confidence that we need to continue doing that,” he said.

In terms of outlook, Patil believes that while SIP growth will likely continue, the overall pace may slow down as market conditions evolve especially when seen in the light of volatility in equities as an asset class. This will push investors towards diversifying their asset base, he said.

“There have been some redemptions, but this is a loss,” he said, suggesting that some investors are leaving the market after realising their gains in the strong bull run. This trend may lead to market consolidation, rather than explosive growth, he said.

While he expects certain stocks and sectors to see consolidation in the coming months, he is confident that mutual fund flows, particularly SIPs, will remain a critical part of the Indian investment landscape for the long haul.