Mumbai: Investments into mutual fund schemes through the systematic investment plan (SIP) by retail individual investors have seen a sharp increase during the past two months as the sudden turnaround in sentiments in the secondary market have restored small investors faith in the market.
According to fund managers, investment through SIP has seen a growth of around 25-30 per cent during the last two months. SIP is an investment vehicle offered by mutual funds, which enables an investor to invest a fixed amount of funds on a monthly or quarterly basis.
“What we are seeing is that the confidence retail investors in the equity market is slowly returning. We have seen a 25-30 per cent growth in the registration of new SIP’s. We are consciously pushing this product and it is very important to maintain this momentum going forward,” said Milind Barwe, managing director, HDFC Mutual Funds. He added that the average ticket size of a SIP stood in the range of Rs 2,000 - Rs 4,000 per month.
The inflow of money into equity schemes has also resulted in fund houses turning net buyers of Indian equities during the past two months. Their net investment during May and June 2014 stood at Rs 105.60 crore and Rs 2,523.40 crore respectively. They were net sellers of domestic equities to the tune of Rs 2,698.10 crore during April 2014.
Surajit Misra, executive VP and national head, mutual funds, Bajaj Capital said, “When there was redemption pressure and termination of SIP by small investors, fund houses did ground work to retain investors in those schemes. The results of those efforts are showing now,” he added.
According to Mr Misra, the industry has seen a 70-80 per cent growth in SIP’s in May 2014.
