Distributor-Backed SIPs Sit Tight Through Market Volatility, Says Nippon Life AMC's Sundeep Sikka

India’s mutual fund industry is witnessing a landmark shift with goal-based SIPs on the rise and a growing base of 5.5 crore investors, yet industry leaders Nimesh Shah of ICICI Prudential AMC and Sundeep Sikka of Nippon Life India Asset Management Ltd. note that some investors still chase returns.

Speaking at NDTV Profit's Ignite Conclave, they said that fund managers and the industry to actively shield investors from market euphoria.

He said, "One thing has happened is that when markets fall, people do not panic and get up,” and he praised the regulator, saying, “SEBI has aligned the investors, distributors' interest.”

Sikka warned that when sectors like defense do well, “there were so many funds, and the industry will need to take responsibility that the investors don't get carried away.” He highlighted the stability of long-term money, noting that distributor-backed SIPs bring down redemptions too.

“SIPs come through advisors have remained stable through volatility,” while independent investors are often “always chasing a trend.” S Naren specifically pointed to a fundamental weakness in investor behavior.

“One weakness of the investors are they are pro-cyclical. People still drive the car looking at the rear view mirror,” he said, meaning they invest in what has already done well. He called for the need for skepticism, stating, “Fund managers are trying to say be careful. There should be some amount of scepticism when investing.”

Sundeep Sikka celebrated the industry’s massive achievement, stating, “Today we have reached a point where every Indian is investing at least Rs 200. With 5.5 crore investors, there is more and this is just a scratch in the surface.”

He confirmed the industry’s success in wealth creation stating, “This industry has created more wealth for investors than any other, we are demonstrating that we can create wealth.” Both leaders agreed that the industry must be responsible during bull phases.