Mukesh Kalra, CEO, ET MONEY

 A passionate entrepreneurial leader, Mukesh has over 15 years of experience in building businesses and products from scratch in the consumer internet and mobile advertising space. Prior to heading ETMONEY, he was one of the core members at InMobi and helped build it from concept into the world’s largest independent mobile ad network. He then launched his own fintech firm, Moneysights, which was later acquired by Times Internet, Times Group.

 

Investments in to Mutual Funds are growing from Tier 2 and Tier 3 cities and not the metros. India’s smaller cities are growing their lead in overall SIP contribution and now account for 64 per cent of SIP inflows coming from outside metros and large and important business hubs like Mumbai, Delhi, Bangalore, Hyderabad etc in 2021 as per the ETMONEY SIP Insights report 2021. The smaller cities have been constantly increasing their share of investments via SIPs into Mutual Funds. SIPs have generated an average of 16 per cent returns in the past five years, thus being most rewarding for investors in medium to long term.

At present, the SIP inflows are coming from across all parts of the country and one state from each corner of the country has emerged as a leading state with the most SIP contribution. Maharashtra at 20.56 per cent, Uttar Pradesh at 11.20 per cent, Delhi at 9.03 per cent, West Bengal at 8.08 per cent and Karnataka at 5.65 per cent are the states with the highest SIP inflows. The share of income invested via SIPs has also seen an upward trajectory for the last five years even though it faced a setback in 2020 due to the pandemic. 

India needs to be proud of the fact that investors across age and income brackets are putting their faith in SIPs more and more as the share of the money being invested via SIPs is seeing an upward trend.  In the Rs. 5-10 Lakh income group, the share of SIPs is over six per cent in 2021. In addition to the growing scale of SIP inflows, investment habits have improved. Today, more than 70 per cent of investors tend to continue with their SIP journey once they have started it. There has also been a continuous increase in the number of investors who have started SIPs; most of these investors fall in the age bracket of 30 years and above. Both SIP adoption and retention rates have increased steadily in the past 5 years with a swelling rise in SIPs started by individuals over 30 year of age. Rising digital footprint and increasing financial awareness is encouraging investors to take the SIP route in their investments journey.

Investors are also displaying more understanding and enthusiasm by being in control of their investments. They are choosing a mix of equity and debt funds and creating their hybrid portfolios by combining the asset classes on their own. This trend is encouraging especially for investors who are working towards creating and managing their wealth through investments across Mutual Fund categories. The ETMONEY SIP Insights report reveals that investors are opting for ELSS along with large, mid and small cap as their preferred fund categories with increasing exposure towards equities. 

Though the scope of investments into markets by MFs in India is huge and long way from attaining its potential, the growth of SIPs inflows from non-metros and the improving investment behaviour of Indians is immensely encouraging. The SIP revolution and the evolving behaviour of the new age Indians in regards to their financial journey has indeed played a significant role to advance the wealth ecosystem of India and made the nation all the more ready for future innovations.

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