Mutual Fund SIP Inflows Set for Record Growth Amid Rising Incomes

Increased disposable incomes and investment awareness may boost monthly SIP inflows in the mutual fund sector to Rs 40,000 crore in the next 18-24 months, according to Union AMC's CEO. Despite recent market volatility, investor confidence is buoyed by new tax regimes and improved market valuations.

Monthly SIP inflows in the mutual fund industry are poised to reach Rs 40,000 crore within the next 18 to 24 months, as predicted by Madhu Nair, CEO of Union Asset Management Company. This potential growth is attributed to rising disposable incomes and an increasing awareness of disciplined investment practices.

Though SIP inflows were Rs 25,925 crore in March, the sector had experienced a slump due to market volatility. Nonetheless, the future looks promising with SIP contributions jumping significantly in 2024-25 compared to the previous fiscal year, reflecting retail investors' growing maturity.

Factors such as a new investor-friendly tax regime and improving market valuations are expected to encourage more participation in SIPs. The tax changes effective April 2025, offering exemptions for individuals earning up to Rs 12 lakh, are expected to fuel more investments into systematic plans.

(With inputs from agencies.)