Business Standard

SIP inflows cross ~10,000 cr

But debt-oriented schemes witness ~63,910-crore outflows in September


Inflows into the mutual fund industry through the systematic investment plan (SIP) route crossed ~10,000 crore for the first time in September. Investors opened over 2.6 million SIP accounts during the month and the assets under management (AUM) of SIPS rose to ~5.44 trillion, from ~5.26 trillion at the end of August.

SIP is an investing technique wherein an investor commits a fixed sum every month as opposed to investing a large sum at one go. Sustained inflows through this route has provided the domestic mutual fund (MF) industry a solid foundation for growth.

Strong SIP flows helped equityorie­nted schemes log net inflows for the seventh consecutiv­e month. In September, net equity inflows stood at ~8,677 crore, the data released by the Associatio­n of Mutual Funds in India (Amfi) on Friday showed.

Market participan­ts say that with the continuous surge in the markets over the last few months, investors have preferred SIPS to lump-sum investment­s.

“Investors having surplus money are being advised by their advisors and distributo­rs to stagger their investment­s, given the current valuations of the markets. Many, who want to do lump-sum investing, have been choosing SIPS for 12 or 24 months. This is the reason why SIPS have continued to gain over the past few months,” said Sunil Subramania­m, managing director, Sundaram.

Besides SIPS, the launch of new fund offers (NFOS) and up-move in stocks boosted inflows and AUM.

In September, five equity NFOS collected ~6,579 crore. In the previous month, NFOS added nearly ~6,900 crore to the equity inflow tally.

In September, the benchmark Sensex rose nearly 3 per cent. Over the past year, the index has surged over 50 per cent.

“Rising SIP contributi­ons are due to a mix of the equity markets performanc­e and launch of NFOS over the past few months. Until there is liquidity in the markets, flows will remain positive,” said D P Singh, chief business officer at SBI MF.

Of the 11 equity categories, four categories — small-cap, dividend yield, value, and equity-linked saving schemes (ELSS) — saw net outflows. Multi-cap and thematic funds saw the strongest inflows of ~3,569 crore and ~2,618 crore, respective­ly.

Meanwhile, debt-oriented schemes saw net outflows of around ~63,910 crore in September. Investors also pull money out from short-term debt categories like liquid funds, ultra-short duration, low-duration, and money market funds. Industry players said large outflows from the debt segment were a quarter-end phenomenon. Typically, large institutio­ns — such as banks and corporates — redeem their MF investment­s to pay quarterly advance taxes.

“A few institutio­nal investors redeemed from short-to-medium debt funds on concerns that the RBI policy announceme­nt on October 8 may impact bond yields and hit short-term performanc­e,” said Aashwin Dugal, cochief business officer, Nippon India Mutual Fund.

Overall, the MF industry saw net outflows of ~47,257 crore and AUM as of September stood at ~36.73 trillion.


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