SIPs stay most preferred MF investment route in October, garner record Rs 7,985 crore

Systematic investment plans, popularly known as SIPs, remained the most preferred investment option among retail investors looking to enter mutual fund schemes last month.

According to data provided by Association of Mutual Funds in India (AMFI), the industry garnered Rs 7,985 crore through SIPs in October, slightly higher than Rs 7,727 crore collected in September.

Mutual funds attributed the increased interest in SIPs to investor education and matured investor behaviour. They said investors have continued to keep faith in SIPs during volatile markets.

Over the last one year, AMFI and players from the industry have launched campaigns such as 'mutual funds sahi hai' and Jan Nivesh, which is helping garner interest for a push product like mutual funds.

Fund houses have applauded the increase in average ticket size of SIPs. AMFI data shows the MF industry added 10.05 lakh SIP accounts each month on an average during FY19, with an average SIP size of about Rs 3,200 per SIP account.

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Currently, domestic mutual funds have about 2.49 crore active SIP accounts, through which investors regularly invest in Indian mutual fund schemes.

SIP is an investment plan (methodology) offered by mutual funds wherein a fixed amount can be invested 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 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.

It has been gaining in popularity among Indian 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.