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At a time when inflows into open-ended equity mutual funds almost halved to Rs 5,988.17 crore in June 2021 compared to Rs 10,082.98 crore in May 2021, the SIP (systematic investment plan) numbers showcased a different trend. The numbers of new SIPs registered in June 2021 jumped 37.53% to 21.29 lakh versus 15.48 lakh in May 2021. While the number of SIPs discontinued, or tenure completed remained constant at 7.62 lakhs showed data released by Amfi (Association of Mutual Funds in India). If the data for June 2021 is looked at closely it indicates that for every single SIP that was discontinued three new SIPs were registered.

“Overall penetration has gone up and with markets trading at their highs nobody wants to take a call on lumpsum investments. Moreover, it also shows that people have faith in the markets by don’t want to take a plunge these levels and that’s why they are coming via the SIP route and investing in a scattered manner rather than taking a plunge in one go,” said D. P. Singh, Chief Business Officer at SBI Mutual Fund.

With a net addition of net additions of 13.67 lakh, the total tally of SIP accounts crossed the 4-crore mark and is now at record highs of 4.02 crore. “Number of SIP accounts breaching 4 crore-mark for the first time ever, is reflective of continued retail investor confidence in the mutual fund asset class. Remarkable jump in SIP account opening augurs well for the mutual fund industry and also shows the confidence of retail investors in participation,” said N. S. Venkatesh, Chief Executive of AMFI.

The contributions under the SIP route continued to break records for the second month in a row as it touched lifetime highs of Rs 9,155.84 crore in June 2021 versus Rs 8,818.90 crore witnessed in May 2021. Although the March 2021 SIP contribution stood at Rs 9,182 crore which consisted of Rs 495-500 crore of February reflecting the month of March owing to the weekend dawning at the end of February.

“The volatility in the markets over the last few years has enhanced the appeal of SIPs. Increasingly, investors have started to comprehend the fact that it’s not possible to time the market; and in the process of doing so, they end up missing out on investment opportunities. SIPs on the other hand keep them safe from the risk of timing the markets and helps them to better capitalise on the investment opportunities during turbulent times,” added Srivastava of Morningstar India.

Likewise, the asset under management under the SIP category is also at record highs of Rs 4.84 lakh crore in June 2021 compared to Rs 3.9 lakh crore in January 2021.