Investors have not been deterred by the second wave of COVID 19 and continue to invest in mutual funds through SIPs (systematic investment plans). In spite of the number of new SIP registrations in April 2021 falling by 15.7% as compared to March 2021, the number of new SIP registrations was still at 14,08,000. This is much higher than the new SIP registration levels of March 2020 which stood at around 8,00,000- 9,00,000.
There are various reasons due to which new SIP registrations have maintained such high levels. Prominent reasons are that investors have become increasingly aware of the method of investing through SIPs and investments have been made easier through tech platforms of distributors. Also, investors are realising that disciplined investing through SIPs will help them to tide over market volatility over the long run.
The increasing faith in SIP investments will ensure that Indian capital markets have continued access to domestic capital. As India’s COVID case count has steadily declined from 4,00,000 cases a day to around 2,50,000 cases as of now, which indicates that the situation is slowly coming under control. Since investors’ confidence will steadily increase, investments through the SIP route are likely to continue to increase.