Systematic investment plan (SIP) flows have demonstrated remarkable resilience despite challenging market conditions. SIP contributions hit a record ₹32,297 crore in August 2026, marking the highest monthly inflow ever, according to data from the Association of Mutual Funds in India (Amfi). As reported by Jio BlackRock Asset Management's Sid Swaminathan, who manages over ₹22,000 crore worth of assets, this steady stream of domestic money has helped keep the Indian market resilient even as foreign investors have remained cautious. However, the headline numbers mask significant underlying challenges, with 5.38 million SIPs either discontinued or reached the end of their tenure - the highest since January 2026 when the number stood at 5.55 million. DSP MF's Kalpen Parekh warns that while SIP flows remain resilient, prolonged weak returns could test investor faith, noting that "if an asset class disappoints investors for five, six or seven years, some of that resilience could weaken."
A comprehensive analysis of 120 rolling five-year monthly SIPs across 10 global markets over the past decade reveals significant variations in investment outcomes. According to Niranjan Avasthi, President at Edelweiss Asset Management, the study examined SIP returns from October 2016 to September 2026 in US dollar terms. The analysis shows that while the Nasdaq-100 delivered the highest average XIRR at 19.1%, followed by the S&P 500 at 13.7%, India achieved an average XIRR of 8.4% with 98% of rolling five-year SIP outcomes ending in positive returns.
Market experts highlight concerning trends in investor behavior patterns. Swaminathan from Jio BlackRock Asset Management noted that many investors who have stopped their SIPs have held their investment for less than two years, raising significant concerns about long-term investment discipline. The Kotak Institutional Equities report from September 29th emphasizes that investment decisions are largely influenced by trailing returns and near-term price movement expectations, with sentiment - fear and greed - playing a large role in investment behavior. However, Feroze Azeez from Anand Rathi Wealth provides a more optimistic perspective, noting that the SIP stoppage ratio has improved from around 90% in May-June to 81% in July-August, indicating stronger new SIP registrations compared to discontinuations. Parekh from DSP MF adds that around 90% of investors have monthly cash flows, making their investments also monthly, and emphasizes that "if you are in the accumulation phase, this phase is allowing you to increase the number of units purchased every month."
A significant transformation in SIP allocation patterns is emerging across market segments. Akhil Chaturvedi from Motilal Oswal Asset Management reports that more than two-thirds of active SIPs are now concentrated in flexi, mid, and small-cap funds, which continue to deliver resilient returns. Small-cap funds have shown particularly strong momentum, with monthly inflows rising steadily from ₹2,942.11 crore in January to ₹7,973.33 crore in August. Mid-cap funds have followed a similar trajectory, increasing from ₹3,185.47 crore in January to ₹6,989.40 crore in August. Parekh from DSP MF recommends a 65% equity and 35% bonds and gold allocation for moderate-risk investors, noting that "my SIPs have been going into multi-asset funds for the last two years." He advises that around 40% of his own portfolio is outside equities in bonds, debt funds, hybrid portfolios, gold and precious metals, emphasizing that "weak returns are disappointing for existing investments, but they create an opportunity for new money to be deployed at lower NAVs."
