The Effect of Macroeconomic Factors on the Contribution of Systematic Investment Plans of Mutual Fund Schemes in India

Abstract

This study investigates the effect of selected macroeconomic factors on the Systematic Investment Plan (SIP) contributions to mutual funds in India over the period from April 2016 to March 2024. The key objective is to examine how macroeconomic variables such as Dollar Rate, Foreign Exchange Reserve, Inflation, Gross Domestic Product (GDP), Sensex, and Interest Rate influence SIP contributions by using multiple regression analysis. The results confirm that Dollar Rate, GDP, Sensex, and Interest Rate significantly impact SIP contributions, while Foreign Exchange Reserve and Inflation do not. The study concludes that SIP investments are sensitive to major macroeconomic movements and calls for careful policy considerations to enhance retail participation in mutual funds.