Business

IIE DIGITAL DESK :  Mutual fund investments through systematic investment plans (SIPs) surged to an all-time high of ₹26,688 crore in May 2025, according to data released by the Association of Mutual Funds in India (AMFI). This record-breaking figure underscores the growing trust of retail investors in the Indian equity markets, supported by strong economic fundamentals, positive market sentiment, and a shift toward long-term wealth creation instruments.

The May figure marks a substantial jump from April’s SIP inflow of ₹20,371 crore, reflecting a significant 31% month-on-month growth. It is also a continuation of the upward trajectory witnessed over the past few quarters, as Indian investors increasingly choose mutual funds as a disciplined investment vehicle amid market volatility and inflationary pressures.

SIP, which allows investors to put in a fixed amount regularly in mutual fund schemes, particularly in equity-linked schemes, has become one of the most preferred investment avenues, especially among young and middle-class investors seeking stable long-term returns.

AMFI data also revealed that the number of SIP accounts crossed the 8.85 crore mark in May, indicating widespread adoption across urban and semi-urban demographics. Industry experts attribute this rise to sustained investor education campaigns, digital onboarding facilities, and strong performance by equity mutual funds over the last year.

N S Venkatesh, Chief Executive of AMFI, said, “The record SIP inflow is a testimony to growing investor confidence and maturity in embracing mutual funds as a long-term investment option. The financialization of savings is deepening in India, and this is a very healthy trend for the capital markets.”

Experts also believe that the recent rally in the stock markets, supported by strong GDP growth figures and expectations of political stability after the general elections, has contributed to improved investor sentiment. With benchmark indices like the Nifty 50 and Sensex reaching new highs in May, equity mutual funds saw increased interest, particularly from retail investors aiming to benefit from systematic exposure to the markets.

Fund managers noted that while lump sum investments tend to fluctuate with market conditions, SIPs provide consistency and allow investors to benefit from rupee cost averaging. This is particularly useful in volatile markets, helping investors accumulate more units when prices are low and fewer when prices are high.

Market analysts suggest that the continued growth in SIP contributions also reflects a behavioral shift, with Indian investors gradually moving away from traditional instruments like fixed deposits and gold, toward market-linked products that offer inflation-beating returns over the long term.

In terms of category-wise distribution, equity-oriented funds remained the top beneficiaries of the SIP inflow, while hybrid funds and ELSS (Equity Linked Savings Schemes) also received notable contributions. Debt-oriented funds, on the other hand, saw tepid interest in comparison, as investors remained cautious due to ongoing rate cycle uncertainties.

Brokerage platforms and fintech firms have also played a critical role in expanding the reach of SIPs. Many have introduced user-friendly interfaces, goal-based investing tools, and low-cost direct plans, making mutual fund investments more accessible to retail investors from smaller towns and rural areas.

Fund houses and market observers expect the SIP momentum to sustain, especially as disposable incomes rise and financial literacy continues to improve. They also highlight the importance of staying invested over the long term, regardless of market cycles, to fully benefit from the power of compounding.

With mutual fund SIPs hitting a historic high in May, it is evident that the Indian retail investor is embracing disciplined investing as a core part of financial planning—a trend that may define the next phase of capital market growth in the country.