Fintech firms such as Groww, Angel One and PhonePe have emerged as leading distributors of mutual fund products, adding lakhs of new systematic investment plans (SIPs) each month. The trio collectively accounted for nearly half of the new SIPs opened in November last year.
The Association of Mutual Funds of India (AMFI) said that November 2023 saw the opening of over 3 Mn SIPs. Notably, approximately 1.3 Mn of these SIPs were initiated through fintech platforms, as per industry estimates, ET reported.
While Groww opened over 700,000 new SIPs, Angel One and PhonePe generated more than 200,000 and 120,000 SIPs, respectively.
Paytm Money, the wealth management arm of Paytm, reported an addition of approximately 76,000 new systematic investment plans (SIPs) in November. Simultaneously, ETMoney, another player in the industry, added around 60,000 new SIPs during the same period.
Ujjwal Jain, CEO of Share.Market, the wealth management arm of PhonePe, noted that their platform has experienced significant growth in SIP transactions over the past two years, as per the report.
According to Jain, the total monthly SIP transactions have nearly doubled between December 2022 and 2023.
According to data shared with asset management companies by CAMS (Computer Age Management Services), a mutual fund industry service provider, there has been a consistent increase in the overall share of new accounts opened by fintech firms. The data shows an increase in the overall share of new accounts opened by fintech firms during the period from September to November 2023.
However, traditional distributors such as NJ Wealth and State Bank of India, are not lagging behind. These traditional players are consistently adding an average of over a lakh SIPs every month.
This comes at a time when mutual funds are seeing rapid growth in India. Local equity funds have witnessed inflows for 33 consecutive months, extending through November 2023.
Among retail investors, monthly recurring plans have emerged as the most favoured product, with flows through such plans experiencing a compounded annual growth rate (CAGR) of over 25% since the beginning of the pandemic. In November alone, these plans attracted a record-breaking $2.1 billion, as per Bloomberg Intelligence.
Conversely, the surge in local equity funds and recurring investment plans presents a potential revenue stream for fintech companies. Despite some exceptions like Zerodha, Neogrowth, Indifi, and Groww, a significant number of fintech firms in India are still contending with losses.
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