India's Latest Craze: Systematic Investment Plans in Mutual Funds (SIPs)

India's Latest Craze: Systematic Investment Plans in Mutual Funds (SIPs)

By Abhi Loans

The growth of SIPs in the book has reached 18% of the industry's Assets Under Management, driven by increased awareness and the appealing returns in the equity markets.

SIP Book Growth

The robust performance of equities is motivating investors to transition away from underperforming real estate, leading to an increase in the adoption of SIPs.

Success Factors for SIP Adoption

Financial advisors highlight the importance of aligning SIPs with particular financial objectives, while placing emphasis on considering risk tolerance and timeframes.

Goal-Based Investing

Around half of the equity assets are redeemed within a two-year period, raising inquiries about the reinvestment patterns.

Concerns about the Redemption Period

Trends in the database indicate that investors tend to retain equity funds for a period exceeding five years, showcasing a preference for long-term investment.

Holding Period Insights

Direct investment platforms play a substantial role, enabling investors to start SIPs on their own, without the need for a distributor's participation.

The Impact of Digital Platforms