Inflow into mutual funds through a systematic investment plan is expected to hit an all-time high this fiscal year despite market turmoil following the Russian-Ukrainian war that rocked recovering global economies of the Covid pandemic.

Steady rise

Mutual fund industry SIP inflows have already surged by 29% in the first 11 months of this fiscal year to ₹112,238 crore from ₹86,898 crore recorded in the same period of the previous fiscal year .

The average SIP inflow so far for this fiscal year increased to ₹9,353 crore from ₹7,241 crore recorded the previous fiscal year.

The monthly inflow which started rising from last April at ₹8,596 crore never went down even for a single month until it reached ₹11,517 crore in January despite the stock market volatility . However, it dipped slightly for the first time this financial year to ₹11,438 crore in February.

DP Singh, Chief Commercial Officer of SBI Mutual Fund, said that although inflows in March were slightly lower than last month due to year-end planning by investors, the growth trend of SIP will continue. for the next six months and the next tax inflows will be much higher due to the increased penetration of the mutual fund market and the behavioral maturity of investors.

New slips

SBI Mutual Fund, the largest fund house in the country, registered more than 30 lakh new SIPs this fiscal year to the end of January, registering a growth of 39% compared to the last fiscal year. The fund house has received an average monthly SIP flow of over ₹1,800 crore in the current financial year with an average ticket size of around ₹2,500.

“Over 50% of our Tier II and Tier III SIPs are backed by the strong banking distribution channel and the confidence multiplied by investors after their experience over the past 3-4 years,” Singh said.

Similarly, Nippon India MF SIP inflows increased by 14% to ₹2,010 crore in the December quarter from ₹1,770 crore in the same period last year.

Manish Kothari, co-founder and CEO of ZFunds, said there are indications of a strong upward trend in SIPs in equity funds and it is likely to continue despite February’s marginal decline, mainly due to the lower number of days.

Investors from small towns are attracted to MFs due to the growing awareness of the possibility of investing as little as ₹100 per month, he said.

Ujjwal Jain, CEO and Founder of WealthDesk, said the drop in SIP flows last month needs to continue for at least 2-3 quarters for it to be seen as a clear trend and there is no no big reason for the influx to decline as the national growth outlook remains strong despite global concerns.

Published on

March 26, 2022