While direct mutual fund plans are gaining popularity among younger investors due to lower costs, data from March 2026 shows that 70-78% of SIP assets remain in regular plans. Larger investors continue to favor distributor-led advisory services, highlighting the value placed on professional guidance and behavioral discipline in long-term wealth creation.
The Indian mutual fund industry is witnessing a distinct trend in how investors choose to manage their Systematic Investment Plans (SIPs). As of March 2026, despite the rapid growth of digital platforms that make direct investing easier and cheaper, the majority of SIP assets remain locked in regular plans. These are plans where an investor pays a commission to a distributor or advisor, which is included in the fund's expense ratio.
Regular Plans Lead Among Larger SIPs
The data shows that investment habits vary significantly based on ticket size. Investors contributing larger monthly sums—specifically those above ₹10,000—show a strong preference for regular plans, which accounted for 78% of their SIP assets as of March 2026. This trend holds true across other mid-range ticket sizes as well.
This behavior suggests that investors with more capital often prioritize professional guidance, financial planning, and the behavioral discipline that a distributor provides. For many, the fee paid through the regular plan is seen as a cost for ongoing service, portfolio reviews, and help during market turbulence.
Digital Shift Boosts Direct Plan Adoption
Conversely, direct plans have gained significant traction among smaller investors and the younger demographic. In the ₹500 to ₹1,000 category, direct plans represented 29% of assets. This shift is driven by increased financial literacy and the rise of low-cost, user-friendly digital investment platforms. Younger investors aged 18 to 34 are leading this change, as they are generally more comfortable using fintech tools to manage their portfolios without an intermediary.
The Cost-Advice Trade-off
For investors deciding between the two, the core trade-off is between cost and advice. Direct plans generally offer lower expense ratios because they eliminate distributor commissions, which can lead to higher net returns over the long term. However, the lack of an intermediary means investors must possess the knowledge to manage their own asset allocation, tax planning, and rebalancing.
There is a notable behavioral risk here. Investors who opt for direct plans without sufficient experience may be more prone to panic-selling or exiting their investments during market downturns, potentially hurting their long-term wealth creation. Professional distributors often play a role in helping clients stay invested during volatile phases.
A Decade of SIP Growth
SIPs have solidified their position as a cornerstone of the Indian investment landscape. By March 2026, monthly SIP contributions hit a record ₹32,087 crore, a massive leap from the ₹4,335 crore recorded in March 2017. Total SIP assets under management (AUM) reached ₹14.83 lakh crore, reflecting how domestic retail investors have become a key stabilizer for Indian markets, providing resilience against foreign institutional investor outflows. As the industry continues to evolve, investors should monitor their own financial literacy levels, the impact of expense ratios on their long-term corpus, and whether they require personalized advisory support to meet their specific financial goals.