ET Intelligence Group: ‘Ease of doing business’ does draw money – both big and small. For proof, turn to the SIP meter.
As digital services and mutual fund plans boomed in tandem, SIP account registrations climbed — to a record high of 2.129 million in June. Data from the Association of Mutual Funds in India (AMFI) showed the previous peak was 1.671 million accounts in March. The pace of new SIP additions in June is nearly double of the last two years’ average of 1.121 million accounts, underscoring democratisation of the equity culture in India.
Thanks to a record addition in June, the total tally of SIP accounts reached 40.2 million, of which nearly a fifth has been added in the last one year. SIP account additions expanded at a rate of 30% annually in the past five years.
Gaurav Rastogi, CEO at digital mutual fund platform Kuvera, said that trailing gains have helped. “This makes them bullish on the future and they are allocating more to markets via SIPs (systematic investment plans),” he added.
The marketing head at a leading local asset management company said that buoyancy in capital markets, pace of vaccinations and opening up of physical infrastructure have combined to drive new investors to mutual funds.
The surge in account openings brought down the SIP stoppage ratio — a ratio derived by dividing the number of SIP closed to new accounts opened — to 0.36 in June, the lowest in 39 months. A lower reading of SIP stoppage ratio suggests rising disposable incomes.
The twelve-month rolling cumulative inflows from SIPs rose to Rs 98,234 crore in the past 12 months, compared with Rs 47,897 crore four years ago.
The SIP book stood at Rs 9,156 crore in June, and it has remained at more than Rs 8,500 crore for the fourth month in a row.
Assets under management (AUM) of SIPs stood at Rs 4.83 lakh crore at the end of June 2021, and account for 14.37% of the total industry AUM.
SIP returns of large cap funds in the last one year and three years have been in the range of 22-27% and 52-64%, respectively.