January SIP collection falls 5% after bounce-back in December
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January SIP collection falls 5% after bounce-back in December

The number of SIP accounts increased by 8.78 lakh to 3.55 crore in January. Overall asset under management by fund houses hit a record high at Rs 31.84 lakh crore

  • February 9, 2021  
  • |  
  • UPDATED   22:38 IST
January SIP collection falls 5% after bounce-back in December

After staging a smart comeback in December, the SIP flows in mutual funds receded by Rs 395 crore in January even as the benchmark indices Sensex and Nifty kept hitting fresh highs.

The total SIP contribution in January stood at Rs 8,023 crore, a fall of 4.69 per cent compared to Rs 8,418 crore in December. In fact, December recorded a robust month-on-month jump of 15 per cent over Rs 7,302 crore SIP collection in November. The number of SIP accounts, however, increased by 8.78 lakh to 3.55 crore in January. Overall asset under management by fund houses hit a record high at Rs 31.84 lakh crore.

"January 2021 saw measured maturity-driven redemptions led by smart, goal-based investing and the desire to book profits with equity indices reaching all-time high," says N S Venkatesh, Chief Executive, Association of Mutual Funds in India (AMFI).

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Outflows in equity and debt MFs

Equity mutual funds recorded net outflows for the seventh month in a row at Rs 9,253.22 crore compared to Rs 10,147.12 crore in December. "Though on an overall basis, the net outflow was lower than the previous month, yet in terms of absolute quantum, it continues to be on the higher side," says Himanshu Srivastava, Associate Director - Manager Research, Morningstar India.

"In fact, the net outflow number would have been higher had it not been for the NFO in the sectoral or thematic fund category which collected Rs 4,185 crore," he adds.

While the new investments slipped in January, gross redemptions also came down to Rs 33,383.65 crore from Rs 36,220.28 crore in December. "This suggests that while investors are yet to come back and invest substantially in the funds, there are signs of moderation with respect to redemption as well. Since July, equity oriented mutual funds have witnessed a net outflow of Rs 42,257.02 crore; but the net outflow figure in the last two months have displayed decreasing trend," Srivastava explains.

Income/debt oriented schemes witnessed a net outflow of Rs 33,408.76 crore against 13,862.77 crore inflows in December. Liquid funds were the most hit with an outflow of Rs 45,315.69 crore in January. There was an inflow of Rs 5,102.22 crore in December.

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Short duration funds, corporate bond fund, and banking and PSU fund attracted investor interest with an inflow of Rs 6,892.63 crore, Rs 5,428.51 crore and Rs 1,740.12 crore, respectively.

"On the debt side, owing to regulatory measures to ease liquidity, and also the stance to hold on to the policy rates, some of the debt categories like corporate bond fund, banking and PSU fund, short duration funds have seen positive flows. Even the credit risk fund is now moving into positive flows, given that the risk-return dynamics is working in favour of retail investors," says Venkatesh.

Hybrid and solution-oriented schemes attracted inflows of Rs 2,141.73 crore and Rs 3.87 crore, respectively.

Gold ETFs shine brighter

Gold ETFs, which had seen a net outflow of Rs 141 crore in November, attracted Rs 624.87 crore in January, which is much higher than Rs 431 crore recorded in December.

"The gold prices have come-off its all-time highs touched in August last year. Month of January also saw fair bit of correction in its prices. This, along with expectation that gold may do well going ahead provided a good buying opportunity to investors, which resulted in net inflows for the category in January," says Srivastava of Morningstar India.

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