Inflows via mutual funds SIP hit fresh high at Rs 13,306 cr in Nov

New Delhi: Flows in the mutual fund industry through systematic investment plans or SIPs route rose to an all-time high of Rs 13,306 crore in November, reflecting the growing maturity and confidence of investors.

However, inflows in equity mutual fund schemes plunged 76 per cent to Rs 2,258 crore in November from Rs 9,390 crore in the preceding month, data released by the Association of Mutual Funds in India (Amfi) showed on Friday.

This was also the 21st straight month of inflows into equity schemes.

As per the data, flows through SIP was Rs 13,306 crore in November, surpassing the previous high of Rs 13,041 crore in October.

The inflows through SIPs have been above the Rs 12,000-crore mark since May. It was Rs 12,976 crore in September, Rs 12,693 crore in August, Rs 12,140 crore in July, Rs 12,276 crore in June and Rs 12,286 crore in May. Before that, it stood at Rs 11,863 crore in April.

With this, the total inflow has reached Rs 87,275 crore in the first eight months of the current fiscal. This came following an inflow of over Rs 1.24 lakh crore in the 2021-22 financial year.

"The healthiest trend in the Indian equity market now is the steady increase in SIPs, which have touched a new record of Rs 13,307 crore in November. It is a proven fact that SIPs are the most successful mode of investment for retail investors," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

Increasing SIPs shows that Indian equity investors are maturing, Vijayakumar said and suggested that SIP investors should not discontinue their investment when markets correct sharply.

S Ranganathan, Head of Research at LKP Securities, noted that foreign investors have been booking profits but domestic flows through SIPs are at lifetime highs, which reflects the growing maturity and confidence of the domestic investors.

Also, mutual funds added 11.27 lakh SIP accounts during the month under review, taking the total to about 6.04 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 instalment amount can be as small as Rs 500 per month.

NS Venkatesh, Chief Executive, AMFI, said that mutual fund investors have shown resilience and continue to invest in SIPs, with consistent contributions month-on-month.

Overall, the mutual fund industry registered a net inflow of Rs 13,263 crore in November, slightly lower from Rs 14,045 crore in the previous month, data released by the Association of Mutual Funds in India (Amfi) showed.

"Market continues to react to global headwinds. Rate hikes will continue to impact global markets but not for long, irrespective of whether the mutual fund industry has performed well.

"There have been outflows from the retail schemes as people are encashing profits, the reason being increased consumption, owing to the festive season. Retail investors have faith in the MF Industry growth, therefore they will re-enter the market quickly," Venkatesh added.

Apart from equity, debt-oriented mutual fund schemes witnessed a net infusion of Rs 3,668 crore during the period under review after withdrawing Rs 2,818 crore in the preceding month.

"We believe the upcoming budget will bring cheer to the market which will clear the pathway to more inflows in various schemes, however, debt schemes will stabilise once the RBI rate hikes stabilise," he said.

Other schemes -- index funds, gold exchange-traded funds (ETFs), other ETFs and Fund of funds investing overseas -- saw an inflow of Rs 10,394 crore. This was mainly driven by index funds, which contributed Rs 8,602 crore alone.

However, gold ETFs saw a net withdrawal of Rs 195 crore.

The Assets Under Management (AUM) of the 43-player industry rose to a record high of Rs 40.37 lakh crore at the end of November from Rs 39.5 lakh crore at the end of October.

Mutual fund folios, which have been touching all-time highs since the last three months, reached a fresh high at 13.97 lakh crore, besides, retail mutual folios too reached a record high at 11.17 lakh crore.