According to a study by Zerodha Fund House, over the past year, Index funds have emerged as the fastest-growing category in Systematic Investment Plan (SIP) Assets Under Management (AUM), achieving close to 85% with the live SIP accounts increasing by about 80% over the same period.
FinTech BizNews Service
Mumbai, 19 December, 2024: According to a study by Zerodha Fund House, over the past year, Index funds have emerged as the fastest-growing category in Systematic Investment Plan (SIP) Assets Under Management (AUM), achieving close to 85% with the live SIP accounts increasing by about 80% over the same period.
Higher SIP ticket size growth in Index Funds vis-à-vis the industry:
It’s imperative to note that though the average ticket size of index funds is similar to that of the industry, the growth rate has been higher at 14% for index funds as compared to 8% for the industry.
Vishal Jain, CEO of Zerodha Fund House said, ”As awareness and accessibility continues to grow, Index Funds are well-positioned to become a go-to investment avenue for retail investors seeking to take exposure to the Indian economy in a simple, cost-effective manner.”
Individual Investors own majority of the Index Fund AUM:
The study reveals that the Individual investors account for more than 60% of all index fund AUM as of September 30, 2024. The rest of the AUM is held by corporates and other institutions.
Growth in the Contribution of Index Fund folios to the overall industry folios:
The Index Fund category has also seen a 12x growth in its contribution to the mutual fund industry’s folios over the past five years. Back in September 2019, index fund folios constituted a mere 0.43% of the total industry folios. Fast forward to September 2024, and they now represent around 5% and continue to grow.
The steady growth in SIP AUM and live SIP accounts reflects the growing role of Index Funds in shaping retail investment strategies and points to their potential for continued adoption in the future. With its simplicity, cost-effective structure, and transparency index funds are becoming a preferred choice for investors.
