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Mutual Funds Garner Rs 6,200 Crore Via SIPs In December

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Retail investors are preferring the systematic investment plan option for investing in mutual funds as the industry garnered over Rs 6,200 crore through this route in December, a surge of 56 percent from the year-ago period.

The total money garnered by fund houses through SIPs increased to over Rs 59,000 crore in 2017, compared to about Rs 40,000 crore in 2016, according to data from the Association of Mutual Funds in India.

The higher interest in SIPs could be attributed to robust performance of equity schemes and investor education initiatives taken by industry body Amfi, Kotak Mahindra Mutual Fund Managing Director Nilesh Shah said.

SIPs have been the preferred route for retail investors to invest in mutual funds as it helps them reduce market timing risk, he added.

"SIP has been gaining favour with mutual fund investors, as it assists in rupee cost averaging and also in investing in a disciplined manner without bothering about market volatility" - A Balasubramanian, Chairman, AMFI

He added that investors are no more interested in buying into traditional asset classes, such as real estate and gold, thus moving to financial asset class like mutual fund.

It is an investment vehicle that allows investors to invest in small amount periodically instead of lump sum. The frequency of investment is usually weekly, monthly or quarterly. It is similar to a recurring deposit where investors deposit a small or fixed amount every month.

As per the latest data, the industry garnered about Rs 6,222 crore last month through SIPs as against Rs 3,973 crore collected in December 2016.

Overall, investors infused over Rs 2.3 lakh crore in mutual fund schemes in 2017. And more than Rs 59,000 crore invested through SIPs alone.

The industry added over 9.2 lakh SIP accounts each month on an average, with an average size of over Rs 3,300 per account.

Currently, mutual funds have nearly two crore SIP accounts through which investors regularly invest in Indian mutual fund schemes.

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Going ahead, the SIP culture is likely to continue and entrench in the mutual fund investment landscape, ICICI Prudential Mutual Fund Managing Director and Chief Executive Nimesh Shah said.

“Owing to this, we expect the inflows to be sticky in nature. Of late, whenever the market has been volatile, we have observed that investors have made incremental purchases rather than opting to redeem, which is a heartening development,” he added.

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