Market volatility is putting lump-sum investing in focus as the once-rapid growth in systematic investment plan (SIP) loses momentum. While monthly SIP contributions have hit a record, their growth has slowed, even as the industry's assets continue to expand.
Monthly SIP contributions rose to a record ₹32,490 crore in September, but their year-on-year growth rate fell to 10.7% from 52.8% in September 2024, according to a Mint analysis of data from the Association of Mutual Funds in India (Amfi). The share of active SIP folios in total mutual fund folios also dropped to 35.2% from 47% over the same period.
The widening gap between total mutual fund folios and active SIP folios suggests that mutual fund industry growth is extending beyond regular SIPs. Investors can pour money into mutual funds either through SIPs or lump sum investments.
Market volatility may be prompting some investors with accumulated savings to consider lump-sum investments to take advantage of falling prices. The data on lump-sum investments are not available.
“The data is more indicative of total mutual-fund folios growing faster than SIP accounts,” said Akshay Rao, head of product and strategy at Tata Asset Management. “This rapid growth is being driven by a wider range of products and investor needs—ETFs, index funds, sectoral and thematic funds, debt funds, liquid funds and NFOs—where investments are often also made as lump sums or through non-SIP modes.”