Index funds become fastest-growing category in SIP AUM: Zerodha AMC

Index funds have emerged as the fastest-growing category in Systematic Investment Plan (SIP) Assets Under Management (AUM) in the last one year, achieving close to 85% with the live SIP accounts increasing by about 80% over the same period, according to a study by Zerodha Fund House. 

 

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.

 

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. 

 

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, noted the study. 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.  

 

"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," said  Vishal Jain, CEO of Zerodha Fund House.