New Delhi, Jan 14 (PTI) Retail investors are preferringsystematic investment plan (SIP) option for investing inmutual funds as the industry garnered over Rs 6,200 crorethrough this route in December, a surge of 56 per cent fromthe year-ago period.
The total money garnered by fund houses through SIPsincreased to over Rs 59,000 crore in 2017 as compared to aboutRs 40,000 crore in 2016, Association of Mutual Funds in India(Amfi) data showed.
The higher interest in SIPs could be attributed to robustperformance of equity schemes and investor educationinitiatives taken by industry body Amfi, Kotak Mahindra MutualFund Managing Director Nilesh Shah said.
SIPs have been the preferred route for retail investorsto invest in mutual funds as it helps them reduce markettiming risk, he added.
"SIP has been gaining favour with mutual fund (MF)investors, as it assist in rupee cost averaging and also ininvesting in a disciplined manner without bothering aboutmarket volatility," Amfi Chairman A Balasubramanian said.
Further, he said that investors are no more interested inbuying into traditional asset classes such as real estate andgold, thus moving to financial asset class like mutual fund.
It is an investment vehicle that allows investors toinvest in small amount periodically instead of lumpsum. Thefrequency of investment is usually weekly, monthly orquarterly. It is similar to a recurring deposit whereinvestors deposit a small or fixed amount every month.
As per the latest data, the industry garnered about Rs6,222 crore last month through SIPs as against Rs 3,973 crorecollected in December 2016.
Overall, investors infused over Rs 2.3 lakh crore inmutual fund schemes in 2017. And more than Rs 59,000 croreinvested through SIPs alone.
The industry added over 9.2 lakh SIP accounts each monthon an average, with an average size of over Rs 3,300 peraccount.
Currently, mutual funds have nearly 2 crore SIP accountsthrough which investors regularly invest in Indian mutual fundschemes.
Going ahead, ICICI Prudential Mutual Fund ManagingDirector and Chief Executive Nimesh Shah believes that SIPculture is likely to continue and entrench in the mutual fundinvestment landscape.
"Owing to this we expect the inflows to be sticky innature. Of late, whenever the market has been volatile, wehave observed that investors have made incremental purchasesrather than opting to redeem, which is a hearteningdevelopment," he added. PTI SPBAL.
This is unedited, unformatted feed from the Press Trust of India wire.