With close to 6.50 crore folios, mutual fund industry has been growing and the industry has close to 1.54 crore unique investors, said NS Venkatesh, Chief Executive Officer, Association of Mutual Funds in India.
“We have 1.54 crore unique pan with 4 folios each. This is thanks to unattractive returns from traditional financial investments like FDs (fixed deposits) and untiring efforts of distributors who bring in household savings to the mutual fund fold,” Venkatesh said at a recent CIFA 2018 event organized by Cafemutual.
According to the data on AMFI website, Rs 6,644 crore came into mutual funds in January, capping ten months of robust inflows as benchmark equity indices repeatedly hit records.
Until January, the industry mobilised Rs 53,500 crore, adding about a million SIP accounts every month, with an average SIP size of Rs 3,300.
The rise in Sensex has also helped. In the last one year, until today, BSE has risen slightly over 28 percent to close at 34,346 level.
Venkatesh also said that AMFI is confident of achieving new milestones considering the growing popularity of systematic investment plans and increasing distribution footprint across the country.
Speaking about the increasing number of SIP accounts, he said that the mutual fund industry has close to 2 crore SIP accounts as on January 2018. The industry added about 9.26 lakh SIP accounts each month on an average during FY 2017-18.
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 could be as small as Rs 500 per month. SIP is similar to a recurring deposit where you deposit a small /fixed amount every month.
SIP is a very convenient method of investing in mutual funds through standing instructions to debit your bank account every month, without the hassle of having to write out a cheque each time.
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.
Along with ease of investing it also gives the diversification benefits, most investors prefer mutual funds to equities or bonds.
Venkatesh attributed this to the increased awareness about mutual funds and good fund performance. He said that the ‘mutual fund sahi hai’ campaign has received overwhelming response from investors. “It is been nearly 1 years since we have launched the campaign. From upcoming financial year, we will roll out the second phase of this campaign. We hope that we would continue get encouraging results from this campaign.”