Mutual funds: Why should you raise the SIP inflow every year? Here are 5 key reasons

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systematic investment plans) has been on a consistent rise. The total assets under management (AUM) of SIPs hit ₹9.95 lakh crore in Dec 2023, 14 percent higher than the corresponding data for September, shows the AMFI data. Have you ever wondered why SIP inflows are on a rise? Well, there are multiple reasons for the same.

First, there is an increase in the new SIP accounts created by new investors. Over 1.06 crore new SIPs were created in Dec (2023) quarter alone, which was 47 percent higher than the corresponding figure for June quarter which stood at 72 lakh. Click here for the latest AMFI data on SIPs.

Second, the current investors have been raising their SIP inflow year after year to increase their exposure to different sectors, schemes and market capitalisation. Investment advisors suggest that this is a positive trend and investors should raise their SIPs in order to align with market changes. “It is an acceptable phenomenon that expenses do not increase as much as income does.

So, it is advisable to invest this surplus (increase in income – increase in expenditure) in stocks or mutual funds. This is also seen as one of the key reasons for the spike in SIP inflow," says Sridharan S, founder of Wealth Ladder Direct. 1.

To keep pace with the bull run: In 2023, Nifty50 gave a return of around 20 percent, while Sensex stocks rose by nearly 18 percent. This means the blue-chip stocks are priced 18-20 percent higher than the value at which they were available a year ago. Therefore, to buy the same number of mutual fund units which you bought in 2023 , you are meant to cough up around 18-20 percent higher sum.