Why Are SIPs In the News Again?

Systematic Investment Plans or in short, SIPs is a hassle-free & planned approach for investing money in
the mutual funds. Through this approach, anyone can invest a certain pre-determined amount at a
regular interval whether it is on weekly basis, monthly basis, or quarterly basis etc. Many expert
investors and professional mutual fund investors are aware of “What SIPs is?” But, it has been seen that
many beginner investors are not familiar with its working.
Reason: Gaining Popularity among MF Investors
If we look at the trend in SIP flows, you will see that this year many investors regularly invest in SIPs
schemes as compared to previous year. According to the Association of Mutual Funds in India (AMFI),
43-player industry cleaned up Rs 26,878 crore via SIPs which was 15,602 crore in 2017.
Since the start of 2017, BSE Mid-cap and Small-cap indices have fallen around 11 percent. On the other
hand, the BSE Sensex has risen around 5 percent. Moreover, high crude oil prices, rupee depreciation
against the dollar has kept Indian equity markets volatile.
It clearly indicates that despite volatile market, investors are not stopping. According to some stock market experts, investors are now savvier and mature than before and understand the benefits and risks
involved with SIPs.
Investors become smarter and understand the importance of investing in the economy rather than in
stocks. These days they are not concerned about the volatility and news flows. An investor can pay the
installment of as small as Rs 500 per month. Also, SIPs are a convenient way of investing in MFs through
standard deduction of amount from your bank account on the monthly or quarterly basis.
You know what that means?
You don’t have to write out a cheque.
The other reason of gaining popularity among Indian mutual fund investors, as it helps in Rupee Cost
Averaging and without any worries of market volatility and timing the market.
According to AMFI, monthly inflows touched nearly Rs 7,000 crore in April. Also, mutual fund houses
said that about 95 percent of SIP inflows are for investing in the stock market & the balance in the debt
Final Thoughts: –
In conclusion, we can say that investors have matured in all these years and learned not react on market
noise and continue through SIPs month after month.
The result, many investors were able to build impressive portfolios which directly motivate other people
out there to invest in SIPs which will remain steady and will not react to market volatility.