NUMBER OF THE WEEK
1.7 million SIP folios added in October
In October 2023, a record-breaking 1.7 million new Systematic Investment Plan (SIP) accounts were registered, raising the total number of folios to 73 million. This marks the sixth consecutive month of over one million folio additions, according to the Association of Mutual Funds in India.
The inflow from SIPs reached Rs 16,928 crore in October, contributing to a total inflow of Rs 1.75 crore over the preceding 12 months. Assets under management for SIP-based investments stood at Rs 8.6 trillion.
SIPs have not only imparted stability to the Indian market amid substantial withdrawals by foreign institutional investors but also offer considerable benefits to investors in a volatile market. Persisting with SIPs during such times enables investors to acquire units at reduced prices, enhancing their long-term returns.
Furthermore, SIPs align well with the cash flow patterns of investors, particularly those earning a salary.
They also render market valuations less significant, allowing investors to maintain their SIP contributions regardless of the market’s high or low valuation, thus averaging their unit purchase costs. Conversely, lump-sum investments during periods of high market valuation carry heightened risks. A steep market downturn can lead to significant, albeit notional, losses in portfolio value, often causing investors to lose confidence and pull out their money at the wrong time.
