Direct plans gain in long-term SIPs, but regular plans continue to dominate

The share of mutual fund systematic investment plan (SIP) assets in direct plans held for over five years more than doubled to 16.6 per cent in September 2026 from 6.9 per cent in September 2021. However, regular plans continue to dominate this category, accounting for ₹4.77 trillion of the ₹5.73 trillion in SIP assets.

Direct plans allow investors to invest without an intermediary and carry lower expense ratios. Regular plans, sold through individual agents, banks and wealth managers, tend to have higher longevity as investors benefit from professional guidance.

The share of direct plan has inched up in other periods as well, as they continue to grow in popularity. In the 4-5 year old SIP cohort, its share is up from 12.5 per cent to 23.7 per cent in the last period. Similarly, in the 3-4 year band, the share is up by nearly 10 percentage points.

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Their share of SIP assets in the over-five-year category rose from 14.3 per cent in September 2025 to 16.6 per cent in September 2026. In the one-to-two-year category, it increased to 30.9 per cent from 27 per cent over the same period. Among SIPs less than a year old, the share rose to 32.3 per cent from 30.7 per cent.

The rising SIP longevity, even in direct plans, is attributable to growing investor maturity. However, there are other factors as well. Experts say the share of direct plans in long-running SIPs was bound to be low until a few years back because direct plans are a recent phenomenon. Although introduced in 2013, direct plans have gained traction in recent years with the growth of digital investment platforms.

Consequently, fewer direct-plan SIPs have had the opportunity to build a five-year track record.