Before giving any data as to why SIP is the best, let’s know, what is SIP?

Via the SIP mode of investment one can invest in mutual funds periodically a fixed amount of money at a fixed interval of time. Say, once a month and on the date, you are comfortable with, instead of making a lump-sum investment.

The SIP installment amount could be as small as Rs 500 per month. SIP is similar to a recurring deposit where you deposit a small/fixed amount every month.

Why SIP’s are on the rise?

Despite the 23% fall in the benchmark indices of the market, the month of March showed a record high inflow of investment through SIP in mutual funds. In February the inflows were of Rs. 8,512.93 crore, while in March it went up to Rs. 8,641.20 crore. The number of folios increased from 3.11 crore against 3.09 crore registered in February.

In this financial year i.e. FY20, total SIP collection was Rs 100,084 crore from Rs 92,693 crore a year ago.

According to data of the AMFI MF industry added, on an average, 9.55 lakh SIP accounts each month during the current financial year (FY20). The average SIP size of about Rs 2,800 per SIP account.

What is the position of the equity market in this situation?

Equity funds registered highest-ever inflows of Rs 11,723 crore in FY20. In February, equity funds had recorded inflows of Rs 10,795 crore. The increase in the investment of equity shows that people of India are becoming more mature regarding investment and equity as a long-term investment option. Despite the negative market conditions, people are developing faith in investment for the long term. 

Overall, the assets under management (AUM) of a 42-player mutual fund industry dipped 18 percent in March to Rs 22.26-lakh crore against Rs 27.22-lakh crore reported in February.

Happy Investing!

Mutual Fund is subject to market risk please read offer related document carefully before investing.