AUM of SIP schemes surpasses Rs 5 lakh crore mark

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The ongoing bull run in the equity markets and low interest rate on debt instruments has made equity SIP (systematic investment plan) the most preferred investment tool for retail investors. This is visible from the fact that the contributions under the SIP continued to break records for the third month in a row as it touched lifetime highs of Rs 9,608.86 crore in July 2021 compared to Rs 9,155.84 crore in June 2021 and Rs 8,818.90 crore witnessed in May 2021. Although the March 2021 SIP contribution stood at Rs 9,182 crore which consisted of Rs 495-500 crore of February reflecting the month of March owing to the weekend dawning at the end of February.

“The markets have been on a positive trajectory as expectations over the return to normalcy have been driven by the pace of vaccinations. Positive earnings growth and an overall improvement in the global, as well as domestic liquidity, have also led to an increase in investments. The overall positive increase is also reflected in healthy growth in the SIP book,” said Kavitha Krishnan, Senior Analyst – Manager Research, Morningstar India.

The continuous inflow and rally in the stock markets have taken the AUM (assets under management) under the SIP schemes to Rs 5,03,597.35 crore for the first time ever. The AUM has jumped 58% in the last year.

“Rising affinity towards mutual fund asset class is seen from the steep jump in retail SIP accounts at 4.17 crores, monthly SIP Contribution at Rs 9,608 crores, SIP AUM at Rs 5.03 crores, Retail AUM at Rs 16.25 lakh crores, and Net Retail Flows at Rs 40,302 crores and Equity Flows at Rs 22,583.52 crores in July 2021, all at record highs, driving overall Mutual Fund Industry AUMs too to historic high at Rs 35.31 lakh crore,” said N S Venkatesh, Chief Executive, AMFI.

Even the number of SIP accounts came in at record highs with the month of July 2021 witnessing a net addition of 15.24 lakhs accounts taking the tally of accounts to 4.17 crore accounts in from 4.02 crore accounts in June 2021.

“A lot of investors have also been preferring the SIP route given the increased awareness around investing. Moreover, this has been a great way to invest small amounts on a consistent basis. It’s also a great way of investing for first-time investors,” Krishnan said.