Investors engaging in regular mutual fund SIPs (Systematic Investment Plans) demonstrate a significantly longer holding period compared to those investing via direct plans. This insight comes from data highlighted by SEBI whole-time member Amarjeet Singh, presented at the NJ Partners Business Training 2026 event on August 13.
Regular vs. Direct: The Holding Period Disparity
According to the data, a substantial 34% of SIP assets within regular mutual fund plans are retained for more than five years. In contrast, only 20% of SIP assets in direct plans achieve this long-term holding status. This difference underscores a distinct investor behavior pattern between the two investment routes.
Regular plans typically involve the guidance of financial distributors or advisors, while direct plans allow investors to deal directly with the fund house, bypassing intermediaries. Singh emphasized that SIP assets now constitute over 21% of the total assets managed by the mutual fund industry, highlighting their growing importance.
Distributors as 'Behavioural Anchors'
Amarjeet Singh suggested that mutual fund distributors serve as crucial "behavioural anchors" for investors. This role becomes particularly vital during periods of market volatility, where investors might otherwise be tempted to prematurely stop their SIPs, redeem investments, or chase after recently well-performing schemes and asset classes.
"A distributor can provide perspective and help ensure that short-term market movements do not drive long-term investment decisions," Singh stated, underlining the value of professional guidance in maintaining investment discipline.
Implications for Long-Term Investing
While the data clearly shows a correlation between using regular plans and longer holding periods, it does not definitively prove that distributors are the direct cause of this behavior. However, Singh's comments highlight a potential benefit of the distributor model in fostering a disciplined, long-term investment approach.
The mutual fund industry continues its rapid expansion, with Assets Under Management (AUM) reaching approximately ₹85 lakh crore, over 27 crore folios, and more than 6 crore unique investors. A significant portion, around 71%, of mutual fund assets held by retail and high-net-worth individual (HNI) investors still originate through distributors. The holding-period data therefore offers valuable insights into how different investor segments engage with their long-term financial goals.