SIP accounts AUM jumps 38% in 2023, share in mutual fund assets tops 19%

Systematic investment plan (SIP) accounts are gradually tightening their hold on the mutual fund industry amid growing retail interest in equity mutual fund schemes.

Within a year, the share of SIPs in the total MF assets under management (AUM) surged to 19.1 per cent in November from 16.6 per cent at the start of 2023.

It stood at around 12 per cent at the end of 2019, according to data from the Association of Mutual Funds in India (Amfi).

The growing SIP pie indicates the retailisation of MFs. Retail investors, who generally take the SIP route to invest in MFs are growing in numbers even as existing investors step up their investments.

Monthly SIP investments have been going up consistently, rising from Rs 8,023 crore in January 2021 to Rs 17,073 crore in November 2023.

SIP accounts together had an AUM of Rs 9.3 trillion as of November, 38 per cent higher than at the start of the calendar year.

Since 2018, the SIP AUM has surged over 19 per cent annually with the 42 per cent jump seen in 2021 being the highest.

The rise in SIP AUM in 2023 is also a result of a sharp rally in the equity market. The key benchmark indices Nifty50 and Sensex are up over 16 per cent so far in 2023.

At the same time, debt funds, which derive most of their flows from institutional investors, have failed to keep pace.

The AUM of active debt funds at Rs 14.1 trillion in November is only a tad higher than the December 2020 AUM. The decline in interest in debt funds has also boosted the SIP share in the total MF AUM.