The benchmark indices gained around 8% in December alone following renewed interest of foreign portfolio investors (FPIs) and sustained flows form domestic investors. That took the calendar year gain to over 20%. This has prompted more retail investors to opt for equity investments, and SIP has emerged as a preferred route.
Net SIP account registration was at a new high of 19.5 lakh (nearly two million) in December 2023 compared with the five-year monthly average of 14 lakh (1.4 million). In the last five years, SIP investors have poured in a cumulative 6.4 lakh crore (about $80 billion) in the market.
The gross new SIP registration grew by 41% annually in the past five years, while the net SIP accounts rose by 25%. The combination of stellar SIP registrations and 16% annual growth in the SIP monthly book helped the assets under management (AUM) of the SIP schemes to grow by 32% annually during the period. This compares with 14% annual return of the benchmark indices.
The average portfolio value of SIP investors reached a record ₹1.3 lakh at the end of December 2023. What further validates the growing stickiness of SIP investors is the expanding ticket size amid a rising equity market. The average ticket size of the SIP investment touched a 21-month high of ₹2,306 per SIP account in December compared with ₹2,216 a year ago.