What SIPs, Lump Sums, and Market Cycles Reveal About Indian Investors

SIPs as the core of mutual fund investing

There has been a visible shift from short-term trading to long-term mutual fund investing via systematic investment plans (SIPs). For most salaried investors on digital platforms, SIPs are now the primary way of allocating to mutual funds, and they increasingly anchor the investment journey rather than serve as a small add-on.

Bain’s data shows that SIPs have high salience within mutual-fund portfolios across the main salaried archetypes identified in the report. Average SIP contributions per investor have risen meaningfully, increasing by about 1.6x in the last three years. Newer cohorts are not just more numerous; they are also starting with higher SIP amounts than those who joined earlier phases of the market’s expansion. In other words, the “entry ticket” is slowly moving from small experiments to more meaningful, recurring allocations.

The profile of SIP flows is also relatively stable across market conditions. The report notes that SIPs tend to run through short-term volatility without large-scale cancellations or sharp drawdowns. As incomes rise and confidence in markets improves, investors typically increase SIP ticket sizes rather than stop them altogether. This combination of regularity, scaling, and low sensitivity to short-term price movements is what makes SIPs a structural feature of India’s retail-investing landscape rather than a passing trend.

Lump sums: from marginal to meaningful

The more recent change is in lump-sum investing. On digital platforms, lump sums have grown faster than many narratives suggest and now account for a much larger share of flows than they did even a couple of years ago.

The share of lump sums in mutual fund inflows has increased by around 11 percentage points in the last two years, reaching close to parity with SIPs by FY25. The shift is particularly noticeable in equity mutual funds, where lump sums have moved from roughly one-third of flows in FY23 to around 45% in FY25. This suggests that investors are increasingly comfortable deploying discretionary capital in addition to their monthly plans.

There are important differences across segments. Salaried investors still skew more toward SIPs, but within this group, older cohorts such as salaried Gen X show a higher relative share of lump-sum investing, reflecting greater liquidity and longer market experience. Business-owner investors, by contrast, have seen some of the sharpest growth in lump-sum deployments. Their lump-sum inflows have increased by about five times over two years. This is consistent with a segment that is more used to taking risk in their own businesses and is now applying that comfort to financial markets.

How behaviour changes across market cycles

The report draws a clear distinction between how SIPs and lump sums respond to market cycles.

Lump-sum flows are sensitive to market movements. Investors tend to deploy more when markets have corrected and valuations appear more attractive, and to slow down when recent returns have been very strong or when uncertainty is elevated. The intent is to use lump sums more opportunistically, even if timing is never perfect in practice.

SIP flows, by contrast, display much lower sensitivity to short-term conditions. Across investor archetypes, SIPs continue through most phases of the market, and ticket sizes typically rise with income and experience rather than fluctuating sharply with index levels. Long-standing cohorts on platforms tend to run higher aggregate SIPs than newer entrants, reinforcing the idea that systematic investing becomes more central, not less, as investors mature.

This pattern of stable SIPs providing a base and lump sums being adjusted more tactically is one of the clearer behavioural takeaways about the new-age Indian investors.

Segment-level differences in behaviour

Salaried millennials and Gen X investors tend to show what might be described as textbook long-term patterns. On average, they rely heavily on SIPs, gradually increase contributions, and add lump sums in periods of market weakness rather than in response to short-term rallies. Trading velocity is lower than in some other segments, and risk-taking, while rising over time, remains measured.

Younger salaried Gen Z investors and students, by contrast, demonstrate faster growth in SIP participation and ticket sizes but are also more sensitive to market moves. They have been quicker than other groups to increase exposure to mid-cap and thematic funds, and they are more likely to adjust lump sums in line with short-term narratives. Portfolio sizes in these cohorts are still smaller, but they have grown the fastest over the last two years.

Business-owner investors sit somewhere in between. Their portfolios show a higher share of direct equity, higher trading intensity, and a significant increase in lump-sum allocations to mutual funds, especially in higher-risk categories such as mid-cap and thematic funds. At the same time, the report notes a gradual shift in this segment from pure trading behaviour toward more sustained investing through funds.

These differences matter because they show that “retail” is not one homogeneous block. Different segments bring different time horizons, cash-flow patterns, and risk sensitivities to how they use SIPs and lump sums.

Why this phase is important

Although the report focuses on public-market participation, the behaviour it documents has implications beyond listed equities and mutual funds.

An investor base that is comfortable with regular, rules-based investing through SIPs, and that learns to deploy discretionary capital via lump sums in a measured way, is better positioned over time to consider more complex products. If households can build experience across a couple of cycles without being pushed out of the market by mis-selling or sharp drawdowns, the eventual appetite for more structured exposure, whether in the form of REITs, InvITs, or regulated alternative vehicles, is likely to be deeper and more stable.

For now, the evidence suggests that many Indian investors on digital platforms are using SIPs as a long-term core and lump sums as a flexible layer on top, rather than treating markets purely as a trading arena. The data does not claim this behaviour is permanent, but it does indicate that the foundation being laid in this phase is meaningfully different from earlier cycles.

Brand Manager

Aayushi Thakur

Frequently Asked Questions

Q: What is the role of SIPs in India?

A: The report finds that SIPs have become the dominant mode of mutual fund investing on digital platforms, especially for salaried investors. Average SIP amounts per investor have increased by about 1.6x in the last three years.

Q: How are lump-sum investments changing on digital platforms?

A: Lump sums have grown faster than expected and now account for a much larger share of flows. Their contribution to mutual fund inflows has risen by roughly 11 percentage points in two years, reaching near-parity with SIPs by FY25, with particularly strong growth in equity mutual funds.

Q: How do SIPs and lump sums behave across market cycles?

A: According to the report, lump-sum flows tend to be more market-sensitive, increasing after corrections and slowing when markets are elevated. SIPs, in contrast, are relatively stable through short-term volatility, with investors generally continuing contributions and gradually increasing ticket sizes as incomes and comfort levels rise.

Q: Why does this SIP–lump-sum pattern matter for the broader market?

A: The analysis suggests that a base of stable, rules-based SIP flows, combined with more tactical lump sums, can make retail participation less purely pro-cyclical. Over time, this pattern may influence how resilient household participation is through cycles and how prepared investors are to consider more complex products as their experience and wealth grow.

Sources

How India Invests 2025 – Bain & Company