SIPs continue to grow, Jefferies says signs of lumpsum flows moderating shows investors maturity

In a recent analysis by Jefferies, the sustained growth of Systematic Investment Plans (SIPs) remains a prominent trend, indicating the resilience of disciplined investment strategies among Indian investors. Despite signs of lumpsum flows moderating, this observation is interpreted by Jefferies as a clear demonstration of growing investor maturity in navigating market dynamics.

According to the report, SIPs continued their upward trajectory with a notable 28% year-on-year growth and a steady 1% month-on-month increase, reaching an impressive figure exceeding Rs 170 billion. Jefferies emphasizes that this consistent growth in SIPs showcases investors’ commitment to systematic and long-term investment approaches.

Debt and liquid funds experienced minor outflows in November following a robust October. The sector’s Assets Under Management (AUM) witnessed a substantial 21% year-on-year surge, reaching Rs 49 trillion. Equity AUM played a pivotal role, surging by 31% year-on-year and constituting 53% of the total AUM.

In the month of November 2023, net equity inflows (excluding arbitrage) witnessed a 14% month-on-month decline, totaling approximately Rs 220 billion. This dip can be attributed to a moderation in lumpsum flows and New Fund Offers (NFOs), influenced by robust market performance.

Jefferies’ report underscores the evolving landscape of India’s financial markets, where investors are displaying increased maturity in their decision-making amid the fluctuations in market dynamics. The sustained growth of SIP amid the broader moderation in inflows further reflects investors’ commitment to systematic and disciplined investment strategies.