SIPs remain retail investors' favourite despite volatility in markets
Rashmi Pratap October 10, 2019
Inflows into mutual funds, including equity-linked schemes, went up to Rs 8,262.94 crore in September, indicating the continued faith of investors in systematic investment plans (SIPs). The figure was Rs 8,230 crore in August and Rs 8,324 crore in July. Even the number of SIP accounts went up to 2.83 crore from 2.81 crore in August 2019. "We have seen a positive growth in the mutual fund market from retail investors. New SIP account opening are showing a robust growth. SIP is here to stay," said NS Venkatesh, Chief Executive, Association of Mutual Funds in India (AMFI), while releasing the data.
While the broader markets have been exhibiting volatility, a better performance there would see SIPs outperforming, said Venkatesh. "The regulator has done a phenomenal job in mitigating the risks in the debt market investments. For equity funds, we see the growth is mirroring the markets," Venkatesh added.
"As long as the retail investor has faith, there is no cause for worry. SIP is an important indicator and that trend is positive," says UR Bhat, Fund Manager, Dalton Capital Advisors.
The MF industry AUM (asset under management) stood at Rs 24,50,787 crore for September 2019, while the retail AUM was Rs 11,23,779 crore. However, on a net level, the inflows into equity mutual funds were down for the fourth straight month and reached Rs 6,489 crore in September. While open-ended equity schemes witnessed an inflow of Rs 6,609 crore, the outflow stood at Rs 120 crore from close-ended equity plans, resulting into a net equity inflow of Rs 6,489 crore.
Net inflows in equity and equity-linked saving schemes stood at Rs 9,090 crore in August, Rs 8,092 crore in July and Rs 7,585 crore in June. Liquid funds, too, saw net outflows of Rs 1.51 lakh crore in September following outgo from liquid, money market funds. "Liquid funds have seen redemptions, which is a phenomenon we have seen at the quarter end, for the advance tax purposes and the same is reflected in this month, September being a quarter-end," said Venkatesh. "Going forward, if the equity markets start showing growth, we should see positive upward trend in mutual funds too," he added.