Investors are betting big on systematic investment plans or SIPs to generate long-term wealth, with monthly flows in the mutual fund industry through the route rising to an all-time high of Rs 13,040 crore in October. This surpassed the Rs 12,976 crore inflow seen in September, data with Association of Mutual Funds in India (AMFI) showed on Thursday.
The inflows through SIPs have been above the Rs 12,000-crore mark since May. It was at Rs 12,140 crore in July, Rs 12,276 crore in June and Rs 12,286 crore in May. Prior to that, it was at Rs 11,863 crore in April.
With this, total inflow has reached over Rs 87,000 crore in the first seven months of the current fiscal. This came following an inflow of over Rs 1.24 lakh crore in the 2021-22 financial year. “Markets continue to react to the global factors and domestic rate hikes. However, mutual fund investors have shown resilience and continue to invest in SIPs, with consistent contribution month on month. There is growth in overall equity AUM and folios too,” N S Venkatesh, chief executive of AMFI, said.
Also, mutual funds added 9.52 lakh SIP accounts during the month under review, taking the total to about 5.93 crore.
SIP is an investment methodology offered by mutual funds wherein an individual can invest a fixed amount in a chosen scheme periodically at fixed intervals, say once a month, instead of making a lump sum investment. The SIP installment amount can be as small as Rs 500 per month.
The 43-player mutual fund industry mainly depends on SIPs for inflows, with equity mutual funds attracting Rs 9,390 crore in the month of October. This also marks the 20th straight month of inflows into equity mutual funds. In comparison, equity funds attracted Rs 14,100 crore in September.
Equity schemes have been witnessing net inflow since March 2021. Before this, these schemes had witnessed outflows for eight months from July 2020 to February 2021, losing Rs 46,791 crore. In addition, gold exchange traded funds (ETFs) saw an inflow of Rs 147 crore in October as against Rs 330 crore in the preceding month.
On the other hand, debt mutual funds witnessed an outflow of Rs 2,818 crore last month as compared to a withdrawal of Rs 65,372 crore in September. Overall, the mutual fund industry registered net inflows of Rs 14,047 crore in the month under review compared to a pull out of Rs 41,404 crore in September. The inflow pushed the Assets Under Management (AUM) of the industry to Rs 39.5 lakh crore at the end of October, from Rs 38.4 lakh crore at the end of September.
Mutual fund folios, which have been touching all-time highs since the last two months, reached a fresh high of 13.91 crore in October.
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