Lumpsum still preferred route of equity MF investment

If you happen to be a regular viewer of television or read newspaper regularly, it is hard to escape the pervasive advertisement of 'Mutual Fund sahi hai'. Riding on this, many fund houses are also promoting systematic investment plan (SIP) equally aggressively. The impact is clearly visible on the rise of investment through SIP.

According to the latest data released by Association of Mutual Funds in India (AMFI), fund flow through SIP stood at Rs. 5,900 crore, which is an increase of little more than 5 per cent month on month basis. In the first eight month of FY18, average SIP inflows were Rs. 5,000 crore every month. This is higher by almost 40 per cent on yearly basis.

In FY17, average monthly SIP inflow was at Rs. 3,600 crore. Despite such impressive growth of SIP, their flows as a percentage of inflows into equity and equity-oriented funds has reduced from around 36 per cent in FY17 to around 25 per cent in April-November 2017. So far, inflows into equity and equity oriented funds in FY18 are averaging around Rs. 20,000 crore per month, nearly double that of what was done in FY17.