Mumbai: Despite inflows into equity mutual funds slowing to a two-year low in January, inflows through SIPs, or systematic investment plans, hit a record high of Rs 8,064 crore during the month.
Altogether, mutual funds now have about 2.57 crore SIP accounts. SIP contributions had, for the first time, crossed the Rs 8,000-crore mark in December at Rs 8,022 crore, according to the Association of Mutual Funds in India (AMFI) data. “'8,000-crore SIP contributions happened because new investors were coming in, as the fixed deposit rates were down, gold was trading in a tight range, real estate was down and equity market was euphoric,” said Rahul Mantri, partner, Midas Touch, a firm engaged in financial planning.
However, he said SIP contributions could taper if returns do not improve. “For the last two years SIP returns have turned negative, if returns do not come in, new investors may not join this new investment tool, as retail investors go with historical data, and they will require a lot of handholding,” Mantri said.
AMFI data shows that the mutual fund industry had added about 9.31 lakh SIP accounts each month on an average during the FY 2018-19, with an average SIP size of about Rs 3,150 per SIP account.
SIP has been gaining popularity among MF investors, as it helps in rupee cost averaging and disciplined investment. SIP contributions have risen consistently in the last three years from Rs 3,122 crore in April 2016 to over Rs 8,000 collection in the last two months.
