23 hrs ago
SIPs Gain Ground as Volatility Reshapes Equity Fund Investing
Many people invest in mutual funds through SIPs, which let them put in a small amount regularly.
They are using SIPs more because stock markets have been uncertain and returns have been quiet.
SIPs can help investors avoid trying to guess the perfect time to invest.
Digital apps, UPI payments and lower minimum amounts have made this easier.
People in smaller cities and younger salaried investors are also joining.
In contrast, fewer investors are putting large amounts into equity funds all at once.
Some investors have redeemed their SIPs, but new investors and continuing contributions have kept the trend strong.
Fund managers believe SIPs may remain popular if investors continue learning and staying invested.
SIPs accounted for 83% of equity-scheme inflows in FY26, up from 57% in FY25 and 67% in FY24.
SIP contributions reached Rs 32.297 crore in August 2026, representing 89% of equity-fund inflows that month.
Fund executives attributed the shift to volatility, investor awareness, digital access and growing participation from smaller cities.
Lump-sum investments have become more selective as investors avoid making large allocations amid uncertain valuations and muted returns.
SIP redemptions have also risen, but fund managers say continued flows show the product is becoming embedded in household investing.
- Who
- Retail mutual-fund investors, particularly younger salaried investors and participants from smaller cities, along with fund managers.
- What
- Investors are increasingly directing equity-fund money through systematic investment plans instead of lump-sum investments.
- Where
- Across India, including tier-2 and tier-3 cities.
- When
- The shift is reflected in FY24, FY25 and FY26 data and strengthened in August 2026, during FY27.
- Why
- Market volatility, muted returns, greater financial awareness, digital access, low investment minimums and easier payment systems have made regular investing more attractive.
SIP Preference
Lump-Sum Flexibility
Managing market timing
SIP Preference
SIPs spread investments across time and price points, reducing the need to decide when to commit a large amount during volatile markets.
Lump-Sum Flexibility
Lump-sum investing can remain appropriate for investors willing to take a market-timing view, although fund managers said many investors are now less willing to do so.
Investor suitability
SIP Preference
Regular investing fits younger salaried investors whose investible surplus accumulates monthly and offers smaller-city investors access with relatively small amounts.
Lump-Sum Flexibility
Lump-sum investments may suit investors with occasional windfalls or a strong market view, but their relative importance in equity funds has declined.
Performance and persistence
SIP Preference
Fund managers say SIP resilience through weak markets indicates stronger long-term conviction, and some multi-cap, mid-cap and small-cap SIP strategies have delivered stronger returns.
Lump-Sum Flexibility
SIPs are not risk-free: prolonged muted returns have increased redemptions, and their future balance with lump-sum flows may still change with market conditions.
Key facts
- FY26 SIP share
- SIPs represented 83% of total inflows into equity schemes.
- Previous SIP shares
- SIPs represented 57% of equity-scheme inflows in FY25 and 67% in FY24.
- August 2026 SIP contribution
- SIPs reached an all-time high of Rs 32.297 crore.
- August 2026 equity share
- SIPs contributed 89% of equity-fund inflows in August 2026.
- Lump-sum trend
- Large one-time investments have become more selective amid volatility and subdued returns.
- Other allocations
- Investors have also been allocating more money to gold, silver, hybrid and multi-asset strategies.
- Investor behavior
- SIP redemptions increased even as the mutual-fund industry continued adding investors.
Quotes
Anand Vardarajan
Managing director and chief executive officer of Tata Mutual Fund
“Lumpsum investing demands a view on timing, and investors are increasingly unwilling to take that view. With valuations debated and volatility elevated, deploying capital in one tranche feels riskier than it once did.”
financialexpress.com
“SIPs as a disciplined way of staying invested through market volatility”
financialexpress.com
Sources
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