Share of Direct Plans in Mutual Fund SIPs Surges to Approximately 40%

New Delhi, Dec 5 (NationPress) The evolution of online investment avenues is significantly impacting the mutual fund market, as the proportion of direct plans in SIP (Systematic Investment Plan) accounts has surged to roughly 40%, compared to approximately 21% four years ago.

This shift in investment behavior indicates that individuals are increasingly opting for direct channels for their investments.

Mutual fund investors have the option to select between direct and regular plans.

Regular plans can be acquired through intermediaries such as agents and banks, which charge a commission for their services, deducted from the investor's capital.

On the other hand, direct plans are free from commissions, requiring investors to manage the investment process independently.

The proportion of direct plans was recorded at 39% among 10.1 crore SIP accounts by the end of October 2024. This figure stood at 21.5% in October 2020 and 17% in March 2020.

This trend has favorably influenced SIP Assets Under Management (AUM). Industry statistics reveal that the AUM associated with direct plan SIPs has escalated to Rs 2.7 lakh crore by October 2024, up from Rs 29,340 crore in March 2020. During this time, the share of direct plans in SIP AUM has grown by 12.2% to 20.3%.

In October of this year, SIP inflows hit Rs 25,323 crore, marking the first instance in which the SIP figure surpassed Rs 25,000 crore in the nation.

The consistent rise in SIP figures demonstrates that individuals are prioritizing investment in mutual funds via SIPs.

Moreover, the total AUM of the mutual fund industry reached a new peak of Rs 66.98 lakh crore in October, reflecting a 0.25% month-on-month increase from Rs 66.82 lakh crore in September.