Systematic Investment Plans (SIPs) in mutual funds are growing in popularity, with record-breaking participation from retail investors. According to the latest data, the number of SIP accounts surged to an all-time high of 10.22 crore in November 2024, up from 10.12 crore in October. The SIP AUM (Assets Under Management) also reached an impressive Rs 13.54 lakh crore, reflecting the growing interest of small investors in equity markets.
Notably, monthly SIP contributions surpassed the Rs 25,000 crore mark for the second consecutive month, standing at Rs 25,320 crore in November 2024. This growing trend underlines how retail investors are increasingly leveraging SIPs to tap into the opportunities offered by India’s robust equity markets.
Small contributions, big rewards
One of the standout features of mutual fund SIPs is their accessibility, with some funds allowing investments starting as low as Rs 20 a day. The impact of such small investments, when combined with the power of compounding, can be transformational over time.
Also read: Mutual Fund SIP Calculator: Rs 100 daily investment can take you to Rs 2.61 crore corpus in 20 years – Check out this MF scheme
Anupam Singhi, Chief Investment Officer at O’Neil Capital Management India and CEO at William O’Neil India, explains:
The power of compounding can turn even the smallest contributions into significant wealth over time. A Rs 20-a-day SIP investment with 20% annual step up in an equity mutual fund can grow into Rs 34 lakh in 20 years, assuming an annualised return of 14%. To put it in perspective, this requires just Rs 7,300 in the first year and this can be increased by 20% every year.
Calculations:
First year investment: Rs 7,300
Annual step-up: 20%
Annualised return: 14% (large-cap MFs have delivered 13-14% in the last 10 years)
Total investment in 20 years: Rs 13.44 lakh
Returns in 20 years: Rs 20.54 lakh
Total corpus: Rs 33.98 lakh
Proven potential of equity markets
The Indian equity market has consistently proven its strength as a wealth-building avenue. Benchmarks like the NIFTY50 and the S&P BSE Sensex have delivered annualised returns of over 12% since inception, making them ideal for long-term wealth creation.
Singhi highlights, “Large-cap mutual funds,
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