Radhika Gupta Slams SIP Critics, Shares Investment Mantra

Systematic Investment Plan or SIP is an investment plan wherein an investor can invest a fixed amount of money in a mutual fund scheme periodically at fixed intervals. SIPs are growing in popularity as a means of investment.

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Amid the growing popularity of mutual funds and SIP investment, several articles have alleged that the popular mode of investing is a ‘scam’. Radhika Gupta the Managing Director & Chief Executive Officer of Edelweiss Mutual Fund slammed such articles and called them ‘clickbait’.

“The clickbait articles on mutual funds being a scam and retail investors being silly do not do our citizens any service,” Gupta said in her post.

Gupta also emphasised the importance of mutual funds and said that SIPs not only appeal to the investment needs of investors but also their savings needs.

“The mutual fund industry created an instrument that appeals not just to the investment needs, but the regular savings needs of Indian investors.  We spend time educating investors and money marketing this solution,” Gupta said.

Gupta added that SIPs are used by crores of investors. Gupta also mentioned that the money invested via SIPs into mutual funds is around Rs 26,000 crore. Notably in December, the total inflows into mutual funds via SIPs stood at Rs 26,459 as per data by the Association of Mutual Funds In India (AMFI).

“Today, crores of investors - common investors - use it and trust it, and that collective trust is worth Rs 26,000 crores a month. That collective trust is what gives stability to our capital markets during periods of sharp FII outflows,” Gupta said.

Gupta slammed articles which allege that SIPs do not generate returns and urged them to look at the ten-year returns of equity funds. She emphasised SIPs' effectiveness and how they allow fund managers to deploy funds in a gradual manner.

“SIPs make money for those who invest in them - check the ten-year returns of a SIP in an equity fund even when markets deliver very average returns - and SIPs allow fund managers to deploy capital gradually,” Gupta said in her post.

Data from the Association Of Mutual Funds In India (AMFI) showed that the number of new SIP accounts opened in the month of December 2024 grew by 9.7 per cent to 54.27 lakh compared to 49.47 lakh in November 2024. However, the SIP stoppage ratio for December 2024 stood at around 82.73 per cent, indicating a high percentage of discontinued SIPs compared to new registrations in that month.