Record High for SIPs in Mutual Funds Despite Market Challenges

Record High for SIPs in Mutual Funds Despite Market Challenges

VoM News Desk | October 11, 2023 | 11:27 PM IST | Breaking News | Follow on Google News

Record High for SIPs in Mutual Funds Despite Market Challenges

Record High for SIPs in Mutual Funds Despite Market Challenges

In September, systematic investment plans (SIPs) in mutual funds reached an all-time high, surpassing the ₹16,000-crore mark for the first time. This surge occurred even as inflows into small and midcap funds moderated due to concerns about overvaluation in certain stocks. According to the Association of Mutual Funds in India (AMFI), net inflows into equity mutual funds declined by 30%, while debt fund outflows reached an 18-month high of ₹1.01 trillion.

SIPs reached ₹16,042 crore in September, rising from ₹15,814 crore the previous month. Net inflows into equity funds fell by 30.39% to ₹14,091.26 crore. Net inflows into small-cap funds decreased by 37% to ₹2,678.47 crore in September, and midcap funds saw a 20% decline to ₹2,001 crore. Debt equity fund outflows soared to ₹1.01 trillion, compared to ₹25,873 crore in the previous month.

Market Dynamics Impacting Fund Flows

The decline in net inflows in mid- and small-cap funds can be attributed to investors booking profits and concerns about overvalued stocks in these segments. On the other hand, debt funds experienced heavy outflows, which experts noted were expected. Outflows from debt mutual funds typically occur during half-yearly closings as banks need to allocate capital against their investments. Most banks had invested in liquid and money market funds because the yield to maturity of these funds is 25 to 50 basis points higher than lending in overnight markets. Corporates also tend to withdraw funds during half-yearly payouts.

Inflows in Sectoral and Thematic Funds

Among equity categories, sectoral and thematic funds witnessed the highest inflows, totaling ₹3,146 crore during the month. This increase can be partly attributed to four new fund launches in this category that collectively gathered ₹1,629 crore in September. In August, this category also recorded the highest net inflows of ₹4,805 crore, aided by five new fund launches.

Industry Asset Under Management (AUM)

According to AMFI data, the asset under management (AUM) for the mutual fund industry stood at ₹46.57 trillion as of September 30. Despite challenges in various segments, the mutual fund industry continues to see growth and diversification in investment patterns.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.