Finance

Published: Jan 28, 2023
Updated: Jan 28, 2023

SIP Investment in Mutual Funds: A Promising Outlook for 2023

The start of the New Year is a time to reflect on the past and look ahead with excitement and anticipation of the upcoming year. As we look ahead to 2023, there are a few key trends and expectations to keep in mind when it comes to investing in mutual funds.

SIP has been a popular avenue for investment among youth

One of the most notable trends of the past year has been the continued popularity of SIPs (Systematic Investment Plans). Despite market volatility and uncertainty, SIP inflows have seen steady growth, with November 2022 inflows reaching Rs 13,307 crores. This trend is expected to continue in 2023, with some analysts projecting monthly SIP book to cross $2 billion per month.

Favourable regulatory environment

Another trend to watch out for in 2023 is the continued growth of mutual fund penetration in India. With an AUM (Assets Under Management) to GDP ratio of approximately 15%, the Indian mutual fund industry is at an inflection point. The regulator is expected to continue creating an environment of trust which will help in increasing the ratio over 20%. Passive investing is also expected to gain more traction in 2023, with more passive-only AMCs(Asset Management Companies) waiting to be launched.

SEBI tightens rules to regulate social media gurus

In addition, there may be regulations on social media influencers and gurus in the mutual fund industry. This is seen as a necessary step to protect investors and ensure that they are making informed investment decisions.

Diversification key to lower risks

Overall, the mutual fund industry in India is expected to continue its upward trajectory in 2023, with SIPs remaining a popular choice among retail investors and mutual fund penetration continuing to grow. However, it is important to keep in mind that investing always carries some level of risk and it is important to diversify your portfolio and stay informed about the markets to make calculated investment decisions.