Amidst concerns on the viability of small ticket SIPs for fund houses and distributors due to high acquisition cost, recent data shared by association of mutual funds in India (Amfi) and CRISIL intelligence showed that 78% of SIP assets below Rs 500 are registered through the regular mode, i.e. mutual fund distributors, as of March 2026.
The share of distributors in SIP assets below Rs 500 has increased by 7%, from 71% to 78%, in the five-year period from March 2021 to March 2026.
Peshotan Dastoor, head of sales, UTI AMC said that regular plan also includes a significant number of small ticket SIPs registered through investment platforms with a mutual fund distribution license, contributing to the channel’s asset share in this ticket size range.
Chennai-based distributor Chokkalingam Palaniappan of Prakala Wealth said that many investors with SIPs below Rs 500 are first-time investors and come from underprivileged sections. Due to low financial awareness, these investors start their investment journey through distributors. He further said that small ticket SIPs above Rs 500 have high participation from young investors like students who prefer direct investment.
While distributor-route has been preferred for the lowest ticket size, direct mode marked an increase in asset share from higher ticket SIPs. 22% of assets from SIPs in excess of Rs 10,000 in March 2026 came through direct investment, in comparison to 13% in March 2021.
A similar trend was seen in assets from SIPs in the Rs 5,000 – 10,000 range where direct mode increased its share from 16% to 28% in this period. Akhil Chaturvedi, executive director and chief business officer, Motilal Oswal AMC said that increased awareness and access to digital and AMC platforms for investors is driving the big shift towards direct investment.
He added that increased engagement by fund houses through digital properties and social media engagements also lead to an organic pull for content, information and execution of their products, boosting direct investment. Dastoor said that many investors choose direct mode to get access to complete portfolios across fund houses on a single platform at low cost.
He added that many experienced investors who have gone through multiple market cycles also opt for direct plans for their new investments while retaining their investments through distributors. Palaniappan said that up to a certain investment corpus size, investors tend to choose direct mode to invest in multiple schemes through SIPs. However, as the corpus size goes beyond Rs 30-40 lakh, most of the investors seek professional help of a distributor.
While experts agreed that popularity of direct mode will continue to increase, they emphasize that distributors will also remain relevant. Dastoor believes that while direct plans have seen increased interest, distributors still have an important role to play in terms of hand-holding investors and reduce pre-mature redemptions during short-term market corrections.
Palaniappan said that he expects both direct and regular modes to see continued growth. “While casual investors will prefer the direct route, serious money will continue to prefer the distributor mode,” he added.