MF Update: Investment through SIP increases by 53 per cent in FY18

With the increasing penetration and rising participation from small town investors the mutual fund SIPs have increased in the last fiscal. The data from AMFI shows that the retail investors are preferring SIP option for investing. The mutual fund industry has received Rs. 67,190 crore through SIP option in FY18 as against Rs. 43,291 crore in FY17. This shows an increase of 53 per cent in last one year in the SIP contribution to the industry.

Systematic investment plan (SIP) is an investment option which allows investors to invest in smaller amounts, periodically like weekly, monthly or quarterly. It is just like the recurring deposits in the banks where investors deposit a small and fixed amount every month.

The strong performance of the equity schemes in the last year and the investor education initiatives by AMFI and a strong campaign of 'Mutual fund Sahi hai' has led the increased the SIP contribution. Going ahead, SEBI’s directive of reducing additional expenses to 5 basis points from 20 basis points is expected to bode well in the coming year for the industry.

As per the AMFI data, mutual fund industry has reaped Rs. 7,119 crore in March 2018 through SIPs as against Rs. 4,335 crore collected in March 2017, where the average SIP size was Rs. 3,375 per account in the last fiscal. The mutual fund industry has added around 9.70 lakh SIP accounts each month in FY18 as against 6.27 lakh in FY17.

With the recent market correction and increasing penetration many market experts expect an increase in the SIP contribution in the coming days.