Investors continue to SIP on equities: Net Inflows in MF schemes up three times at ₹7,303 crore in December

• In December, inflows in equity mutual fund schemes increased three times at ₹7,303 crore from ₹2,258 crore in November, as per AMFI.
• Inflows in smallcap funds and midcap funds were the highest among other equity oriented schemes with inflows to the tune of ₹2,244 crore and ₹1,962 crore respectively.
• Inflows through systematic plans (SIPs) have also increased in December to ₹13,573 crore as compared to ₹13,306 crore in the previous month.

Inflows into equity oriented mutual funds saw a sharp uptick in December at ₹7,303 crore from ₹2,258 in November, despite volatile market conditions. The pick in flows can be attributed to the consistent commitment made by retail investors through systematic investment plans (SIPs). The number of SIP accounts in the industry reached 6.12 crore in December as against 6.04 crore in November.

In December, inflows in equity mutual fund schemes increased three times at ₹7,303 crore from ₹2,258 crore in November, according to AMFI, the regulatory body for the mutual funds sector. Inflows into equity MFs have been positive for straight 22 months now.

Inflows into smallcap funds and midcap funds were the highest amongst equity oriented schemes at ₹2,244 crore and ₹1,962 crore respectively.

"Given the market volatility, investors continue to show maturity in their investment behaviour by continuing their SIP investment. When markets are high, the industry sees SIP less redemptions and at lower market levels, it is SIPs plus additional purchase,” said Manish Mehta, head - sales, marketing and digital business at Kotak Mahindra Asset Management Company.

Meanwhile, debt mutual fund schemes witnessed huge outflows at ₹21,946 crore in December, considering it was quarter-end when corporates take out money to pay tax, said N S Venkatesh, chief executive at AMFI in a monthly call on Tuesday. In November, the inflows in debt funds stood at ₹3,668 crore.

Liquid funds saw huge outflows of ₹13,852 crore followed by floater funds with outflows of ₹2,239 crore.

"Negative in certain funds is understandable because December was the quarter-end month. Here corporates take money out to pay advanced tax, and banks take money out to maintain capital adequacy," said Venkatesh in a conference call.

The MF industry ended 2022 with strong inflows of ₹1.61 lakh crore into equity mutual fund schemes despite volatile market conditions throughout the year on account of elevated inflation, rising interest rates and geopolitical concerns.

Consistent and disciplined SIP inflows by retail investors is among key factors for continuing infusion of funds into equity funds.

Inflows through systematic plans (SIPs) have also increased in December to ₹13,573 crore as compared to ₹13,306 crore in the previous month.

“SIP is a medium to long term investment i.e 5-7 years period in which it can give reasonable returns,” said Venkatesh.

“The importance of investing in equity markets for the longer term goals is not lost on investors and the same is reflected in the ever-increasing awareness and adoption of SIP as a goal-linked route to create wealth over the long term. This month almost 24 lacs new SIPs were registered, which shows increasing investor belief in the instrument. SIPs are the simplest route to build a disciplined habit of regular investing,” said Venkatesh.

Meanwhile, the net assets under management (AUM) of the mutual fund industry grew to ₹39.88 lakh crore from ₹37.72 lakh crore last year.


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