SIP Contributions Rose 7.5% Amid Nifty's 6.4% March Drop

Equity mutual funds pulled in ₹22,953 crore in May, down 40% from a year earlier. It was still the 63rd straight month of net inflows.

Systematic investment plan (SIP) contributions tell a different story. They rose 7.5% in March to ₹32,087 crore, even as the Nifty slipped 6.4% and foreign portfolio investors sold a record ₹1.18 lakh crore.

Monthly SIP inflows now sit at ₹30,953.83 crore across 9.64 crore accounts. SIP assets under management total ₹17.12 lakh crore. Annual SIP investments exceed ₹3 lakh crore.

Why the resilience? Sriram BKR, Senior Investment Strategist at Geojit Financial Services, pointed to a structural shift. "The optimism surrounding SIP flows could be attributed to the increasing adoption of individuals to save their income systematically, better awareness among investors on goal planning and the importance of investing in growth-oriented assets," he said. Performance of equities has also drawn millennials and young investors into the market via SIPs, he added.

Varun Gupta, CEO of Groww Mutual Fund, said past disruptions like COVID-19 reinforced the value of staying invested. "SIPs have increasingly become a financial habit rather than a market call, with investors focusing more on ensuring discipline over short-term market movements," he said. Investing is now linked with long-term financial goals, where equities remain one of the most effective asset classes, Gupta added.

Nehal Meshram, Senior Analyst at Morningstar Research Investment, cited a shift from physical assets like gold and real estate to financial assets. "The automated nature of SIPs plays a key role, auto-debiting investments at regular intervals removes the need to time the market, reduces emotional decision-making, and helps investors stay disciplined even during downturns," Meshram said.

Subhendu Harichandan, Executive Director at Anand Rathi Wealth, said market volatility is unavoidable and should be viewed as a normal part of long-term investing. "Investors who remain disciplined during periods of uncertainty have always been rewarded when markets recover," he said. He recommended following a well-designed investment strategy instead of reacting to short-term movements. Harichandan also suggested stepping up SIP contributions with every salary increase. "Market corrections are often the best time to invest more," he said.

Gupta emphasized that behavior management is as important as portfolio management. "Staying invested, maintaining appropriate asset allocation, remaining focused on long-term objectives, and following a disciplined investment approach can help investors navigate volatility more effectively," he said.

Monthly SIP inflows have stayed above ₹30,000 crore for several consecutive months. The next AMFI data release is due in July.