BFSI Insight Summit 2026: MF CEOs hail SIPs as sector's top innovation

At the BFSI Insight Summit 2026, mutual fund leaders hailed SIPs as the industry's biggest innovation, driving ₹32,000 crore in monthly inflows and widening investor access

Systematic investment plans (SIPs) are the most innovative product developed by the mutual fund (MF) industry, driving monthly inflows of more than ₹32,000 crore, industry leaders said at the Business Standard BFSI Insight Summit on Wednesday.

 

Indian MFs are more cost- and tax-efficient than their counterparts in other global markets, they added, arguing that the thin margins earned by asset management companies (AMCs) ultimately work in investors’ favour.

 

The leaders said current valuations matter less to investors with a long-term investment horizon of 10 to 20 years, even as midcap and smallcap stocks have risen above their fair values.

 

“Innovation means making things accessible for the consumer. Perhaps the most innovative product that has come out of this industry, which people love to praise and love to troll, depending on market conditions, is something called SIP,” said Radhika Gupta, managing director (MD) and chief executive officer (CEO) of Edelweiss MF.

 

 

“MFs are a very transparent, cost-efficient, tax-efficient, choice-efficient product. As long as we remain responsible money managers and media platforms guide investors the right way, and do not make big errors at extreme points, we should continue to add value and the industry will do well,” said Kalpen Parekh, MD and CEO of DSP MF.

 

The leaders said the industry had a vast untapped market to serve in terms of investments.

 

“India is not about margins because, as the margins decrease, it becomes a better and better product for the customer. It is an infinite market because I believe that traditional products are huge in this country,” said Nimesh Shah, MD and CEO of ICICI Prudential AMC.

 

“What the EMI culture did to the Indian consumption story, SIP is doing to the Indian savings and investing story. This is just going to keep increasing. Ten years ago, I think SIP inflows were less than ₹3,000 crore a month, and today we are at ₹32,000 crore a month,” said Sundeep Sikka, MD and CEO of Nippon India MF.

 

Sikka said the industry’s long-term ambition should be to bring MF investing to every Indian household. He said the focus needed to shift from assets under management to the number of people investing. While AMCs and the Association of Mutual Funds in India were working to expand awareness, individual fund houses also needed to reach investors in smaller cities and towns, he added.

 

“If you have a 10-year or 20-year view, today’s valuations don’t matter,” Parekh said, observing that midcap and smallcap stocks had run ahead of their fair values in recent years.

 

He said fund houses had previously restricted or slowed lump-sum investments in smallcap schemes when valuations rose, with some encouraging investors to opt for SIPs instead. Those contributions now formed part of the monthly inflows into midcap and smallcap funds, he added.

 

While the net asset values of midcap and smallcap funds had fallen 4-5 per cent from their peaks, some individual smallcap and microcap portfolios had declined 30-40 per cent, Parekh said. For investors uncomfortable with volatility, hybrid funds, multi-asset funds and flexicap schemes could be more suitable starting points, he added.

 

Shah said fund houses needed to consider how investors outside large cities would understand their products. “MF has become a mass product,” he said.

 

He favoured broad-based schemes such as flexicap, largecap, and midcap funds, which allow fund managers to adjust allocations according to market valuations, rather than requiring investors to make concentrated bets on individual market capitalisation segments.

 

Shah also pointed to hybrid funds as a way for investors to gain exposure to both equity and debt. These schemes can adjust their equity exposure as market conditions change, he said, adding that taxation had influenced how investors approached debt investments.

 

Gupta said the smallcap market also needed to be viewed in the context of India’s changing equity market structure.

 

As more companies list and the market broadens, some sectors likely to drive growth over the next decade could be represented in the smallcap universe, she added.

 

“You can’t ignore smallcap investing,” she said, while stressing that valuations and the quality of individual businesses remained important.

 

Gupta also expects hybrid funds and specialised investment funds to play a greater role in investors’ portfolios, particularly for those seeking income and lower volatility over an 18-24-month horizon. The appropriate product, she said, should depend on investors’ needs rather than the popularity of a particular category.