84% SIP inflows via equity funds in September, shows Amfi data

Systematic investment plans (SIPs) have emerged as the mainstay for the Rs 37-trillion mutual fund (MF) industry. Under this route, investors invest a fixed sum in MF schemes at periodic intervals. 

It has emerged that the bulk of investments coming through the SIP route are into equity-oriented schemes. This is seen as positive for asset management companies as they earn a better spread on equity products.

The data provided by industry body Association of Mutual Funds in India (Amfi) shows equity schemes accounted for around 84 per cent of SIP inflows. Market participants say that the sharp surge in the stock markets and strong returns generated by equity funds have led to investors opting for equity schemes over other offerings.

In September, there were around 38 million active or live SIPs equity accounts. Total inflows or contributions from these accounts stood at Rs 8,670 crore. Overall SIP inflows stood at Rs 10,351 crore in September.

The bifurcation further shows that the top 30 (T-30) cities have 20.2 million live accounts, while the beyond 30 (B-30) cities have 17.8 million live accounts in the equity category. In terms of inflows, T-30 contribute Rs 5,528 crore; Rs 3,142 crore comes from the B-30 cities in equity schemes. So far this financial year, over Rs 56,000 crore has flown into the industry via SIPs.

D P Singh, chief business officer at SBI MF, says: “Equities have continued to dominate SIPs compared to other catego­ries. Investors generally prefer lump-sum investing in debt funds. Also, over the past year, we have seen a surge in the markets and people have con­ti­­nued to invest through SIPs.”

Investors opened over 2.6 million new SIP accounts last month. Assets under management (AUM) of SIPs rose to Rs 5.44 trillion in September, from Rs 3.35 trillion seen in September last year.

In the past year, the Sensex is up nearly 49 per cent, while large-cap funds have given average returns of 54 per cent. Average returns of mid-cap funds and small-cap funds during this period stand at 74 per cent and 90 per cent, respectively.

Among other categories, hybrid, index funds, and other schemes have seen a surge in SIPs in the past year. Inflows through index funds in September this year was Rs 243 crore, compared to Rs 98 crore a year ago.

“Investors who are not comfortable with the current valuations are opting to come in through hybrid funds. With the rise of new-age technology players, first-time investors are coming through the passive route which is why we are seeing growth in both hybrid and index funds,” said a senior executive in the industry.