Mutual Funds: New SIP Investors Notch A Record High in H1 of FY24

Mutual funds (MFs) are once again gaining momentum with new systematic investment plan (SIP) investors notching a record high, which was witnessed during the financial year 2021-22 (FY22).

During the first six months (H1) of this financial year 2023-24 (FY24), MFs have added a net 7.7 crore accounts as against 5.6 crore during the same period of FY23. This year’s net additions are a bit higher than the 7.65 crore additions in H1 of FY22.

This is backed by an improvement in returns in various MF schemes, along with a sharp jump in the equity market from the earlier lows in March 2023. During H1FY24, the NSE Nifty 50 index surged by 13%, while the Nifty Mid-cap 100 and Nifty Small-cap 100 logged a high of 35% and 42%, respectively. 

Going by the numbers, as of October 13, 2023,  about 97% of equity schemes had delivered double-digit returns in the one-year period, as per data. 

Experts state that the growth in the net SIP addition underscores renewed investor confidence driven by robust fund performance and sustained efforts in financial literacy by asset management companies (AMCs) or fund houses. 

SIPs have emerged as a disciplined approach to building a suitable corpus for new investors. It has been seen that existing investors are renewing their SIPs and starting fresh ones, going by their positive historical performances.

In addition, the touch points for selling SIPs have been growing in a consistent manner, state these experts. The industry is consistently adding new MF distributors, which include individuals, bank branches or digital platforms. 

This has contributed to a rise in SIPs coming from new investors, which is about 40%. In 2022, this figure was comparatively lower at about 25%, though. The period was highlighted by a spike in unique investor addition. The industry added 0.23 crore new investors in H1FY24 against 0.17 crore in H2FY23.