Experts explain why retail investors remain big on SIPs despite volatile market — How investing has changed

Data from the Association of Mutual Funds of India (AMFI) showed that domestic investors are not much spooked by market volatility. When the Nifty slipped 6.4% month-on-month in March, SIP contributions grew 7.5% to ₹32,087 crore, even though foreign portfolio investors (FPIs) sold record ₹1.18 lakh crore.

Overall, AMFI data highlighted the significant participation of retail investors in India's capital markets — 9.64 crore accounts, ₹30,953.83 crore in monthly SIPs, ₹17.12 lakh crore in SIP assets under management (AUM), and annual cumulative SIP investments exceeding ₹3 lakh crore.

What is driving confidence in SIPs? Experts say…

We asked experts what is driving optimism among small investors and confidence in SIPs. Here's what they said…

Investors today more mature, SIPs now a financial habit

Varun Gupta, CEO of Groww Mutual Fund felt that there are multiple factors at play. “Investors today have become more mature and hold a better understanding of volatility as a feature of equity investing, not a flaw. The recovery from seemingly disruptive events in the past such as COVID-19 has reinforced the importance of staying invested through market cycles,” he stated.

Adding, “SIPs have increasingly become a financial habit rather than a market call, with investors focusing more on ensuring discipline over short-term market movements. Also, for most investors, investing is linked to long-term goals and wealth creation, and equities continue to be one of the most effective asset classes for building wealth over time.”

“Finally, confidence in India's structural growth story remains strong with investors seeing short-term market fluctuations as unlikely to alter the country's long-term economic trajectory,” according to Gupta.

Shift in the behaviour of Indian retail investors

According to Subhendu Harichandan, Executive Director at Anand Rathi Wealth, optimism in SIP inflows reflects a structural shift in the behaviour of Indian retail investors. He believes that investors today are focused on long term wealth creation rather than short term market movements, recognising that volatility is a normal part of equity investing.

“Even during periods of uncertainty and market corrections, monthly SIP contributions have remained close to ₹31,000 crore. This shows investors’ commitment to disciplined investing. As per AMFI data, during the volatile periods, net equity inflows in March and April 2026 surged to ₹40,450 crore and ₹38,440 crore respectively which are well above last one-year average monthly equity inflow of around ₹30,000 crore. This suggests that investors are no longer getting worried by volatility but are instead using market corrections to increase their investments, recognising that lower markets allow SIPs to accumulate more units,” he noted.

Harichandan added, “The confidence of retail investors is also supported by favourable market fundamentals. Large caps, mid-caps and small caps are currently having negative froth levels. At the same time, corporate earnings expectations remain healthy. Nifty 50 earnings are expected to grow by 12% in FY27 and 14% in FY28, while mid cap earnings are expected to grow by 18% and 16%, and small cap earnings by an even stronger 20% and 18% over the same period. Reasonable valuations combined with healthy earnings growth provide a strong foundation for long term wealth creation, reinforcing investors' confidence in continuing their SIPs through market cycles.”

Better awareness, market performance

According to Sriram BKR, Senior Investment Strategist at Geojit Financial Services, optimism surrounding SIP flows “could be attributed to the increasing adoption of individuals to save their income systematically, better awareness among investors on goal planning and the importance of investing in growth-oriented assets (like equities), ease of investing with rise in online platform options, etc.”

“Another key reason is the phenomenal rise in markets. Broader markets (Nifty-500) had risen by 22.6% CAGR from Jan-2020 till Sep-2024 (pre correction). Even correction post Oct’24 and the recovery in 2nd half of 2025, the CAGR stood at 17.3% as of Dec’25 and 15.2% as of May’26 (post recent war triggered movement). Overall performance of equities has been one factor that brought in many millennials and young investors to participate in the market, via SIPs,” he added.

Structural, behavioral, and experiential factors

A steady shift from physical assets to financial assets has shaped investment in SIPs, feels Nehal Meshram, Senior Analyst at Morningstar Research Investment India. “SIP investors have remained optimistic despite market volatility due to a combination of structural, behavioral, and experiential factors. Rising financial literacy has made investors more aware of rupee-cost averaging and the long-term nature of SIPs, reducing sensitivity to short-term market swings. Confidence in India’s strong economic fundamentals further reinforces their belief in equities as a wealth creation avenue,” she stated.

“At the same time, a steady shift from physical assets like gold and real estate to financial assets has increased participation through mutual funds. Importantly, the automated nature of SIPs plays a key role, auto-debiting investments at regular intervals removes the need to time the market, reduces emotional decision-making, and helps investors stay disciplined even during downturns,” Meshram added.

Further, she felt that a “broader and deeper retail investor base ensures consistent inflows, while past experiences especially recoveries after events like COVID have strengthened investor trust and patience in staying the course”.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.