Investors rooting for SIPs
The rising investor preference towards Systematic Investment Plans (SIPs), could be a subject of great scientific interest and intrigue to Behavioral economists. The recent SEBI affirmed fact that nearly 27% of mutual investors prefer to invest through SIPs, could send the researchers to deep enquiry for weeks, where they would speculate on figuring out the right variables, checking them for possible correlations and co-variations that fall in line with context sensitivity and empathetic neutrality.
For the quintessential investor of the salaried class, for one who would want to shield her/his investment(s) from short-term market fluctuations, the decision is much simpler – that a fixed amount could be invested account at regular intervals, where the investment is almost immune to market fluctuations and delivers handsome results in the long-term, is that which really counts.
Article published by Value Research draws on CAMS data
A recent article as published by Value Research, one of the top Independent mutual fund research house in the country, investigates the growing trend in favor of SIPs, drawing extensively on data and insights as furnished by CAMS – “the registrar for the largest number of AMCs in the industry”, as described by the research house.
Excerpts from the article – The Growing Popularity of SIPs
“The number of SIPs has multiplied dramatically since 2014. Their size has also grown.
Investors’ preference for Systematic Investment Plans, popularly known as SIPs, has grown. As per a compilation of industry data, the SIP count across asset management companies crossed 1.37 crore at the end of July-2016. The number of SIP accounts should be seen in conjunction with total folio numbers. As per SEBI data, the total number of mutual fund folios stood at 4.92 crore at the end of July-2016. This suggests that roughly 27 per cent of the investors in the industry invest through SIPs.
CAMS (Computer Age Management Services) the registrar for the largest number of AMCs in the industry, says that there were 1.02 crore live SIP accounts for the funds that it services, at the end of July 2016. This was a growth of 16.5 per cent from 87.51 lakh SIP accounts at the end of December 2015. CAMS data also showed that it counted 53.71 lakh accounts in June-2014, suggesting that the number of SIP accounts has nearly doubled in two years.
Mr. N. K. Prasad, President and CEO, CAMS attributes the SIP growth to AMC initiatives on investor education and awareness bearing fruit. ‘Investors are increasingly adopting systematic investments to optimize investment returns from the volatile equity asset class,’ he said.
The size of an average SIP is also inching up, having risen from Rs 2,421 in June-2014 to Rs 3,485 at the end of July-2016. SIP sizes could be creeping up with income levels or the investors’ rising comfort levels at allocating more funds to equity.
Smaller cities are taking to SIPs too. ‘Investors in B15 cities too are adopting systematic investment habits and account for over 40% of new systematic registrations. We look forward to MF industry helping retail investors create wealth over long term via regular and systematic investments in Mutual Funds,’ adds Mr. Prasad.”
Computer Age Management Services (CAMS) is India’s premier Mutual Fund Transfer Agency serving over 62% of assets of the industry across 16 Mutual Funds. Leveraging superior technology, CAMS brings several innovative services to Mutual Fund investors and distributors. CAMS is also a service partner to leading Insurance Companies, Banks, NBFCs and Alternate Investment funds. To know more visit http://www.camsonline.com