SIP Inflows Surpasses the Rs 5 Crore Mark for the First Time

The Systematic Investment Plans (SIPs) in the mutual fund industry stood at Rs 11,516 crore in January. As per the data rendered by the Association of Mutual Funds in India (AMFI), 14 lakh new SIPs were added in January. SIPs in the mutual fund industry has exceeded the five crore mark for the first time in January. An average of 24 lakh SIPs were added in the last five months; long-term trends show that investors can now comprehend the importance of SIPs.

Investors are now becoming more mature and are persistent in continuing their SIPs irrespective of market ups and downs. An investor who has come in the last 4-5 years has witnessed the benefits of staying invested in equities and see-through the market volatility. The volatile stock markets could be one of the reasons stopping a few investors from opening a new SIP account.

Since 17 January, the market indices – CNX NSE Nifty and S&P BSE Sensex have corrected four per cent each. One more reason January saw a lower fresh SIP account opening could be because investors were finalising their tax-saving investment options. According to financial planners, investors need to continue investing in SIPs despite market volatility.

With SIPs, investors reap the benefit of rupee cost averaging. When market corrections happen, investors can accrue a higher number of units at lower prices, and when markets revive, they will fetch lesser units at a higher price within the same SIP. This will help investors keep their average buying price lower, and they can also build a large corpus with time via staggered investments.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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