Keeping faith: Highs & lows don’t affect SIP evangelists

MUMBAI: Retail investors continue to repose their faith in systematic investment plans for investing in the stock market. As a result, the monthly SIP inflows have been rising since November last year with some dips in between. The number of SIP accounts, called folios in trade terms, has also been rising steadily.
Industry experts said that long-term investors have remained firmly on track in equity funds, which resulted in record monthly inflows through the SIP route. In August the inflows through this route had jumped to Rs 9,923 crore, an all-time high level, from Rs 9,608 crore in July. This is the second consecutive month of Rs 9,000-crore-plus net inflows through the SIP route, data from industry trade body AMFI showed.
Interestingly, investors who invest through the SIP route also recommend the same to others. A recent survey by Aditya Birla MF found that as high as 83% of the respondents to its survey with SIP investors showed that they were willing to recommend it to others as well. “Almost 50% of people think SIPs help in building long-term corpus with benefit of compounding interest and that would be the primary reason for them to recommend (this) way of investing,” it noted.
August mutual fund assets under management data, the latest disclosed one that has been made available by AMFI, indicated that in several other types of funds, investors were booking profit since the leading indices have been hitting life-high levels on a regular basis. The rise in SIP folios has also been strong. AMFI data showed that so far in fiscal 2022, the total addition to the folios in the industry was nearly 60 lakh or about 16%.
The Birla MF survey also found that since SIPs help maintain investment discipline, it was the single-most important reason for 35% of the respondents to choose this mode of investing. However, the survey also showed that 40% of the respondents started their first SIP in their 40s. Fund managers and investment advisers say that this should start even earlier and indicates that there is a necessity for spreading awareness about it, especially in smaller towns and cities.

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