Notwithstanding the celebration around systematic investment plan inflows touching a new high of ₹17,610 crore in December, the net inflows have dipped to a four month low of ₹6,469 crore and accounted only 37 per cent of gross inflows as investors preferred to book profit with markets hitting a new high.
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In contrast, the SIP inflow in November was at ₹17,073 crore and the net inflow accounted for 53 per cent at ₹9,058 crore, according to data sourced from the Association of Mutual Funds in India. Net SIP inflows dipped 29 per cent in December when compared month-on-month.
While AMFI discloses gross SIP inflows every month, the net inflow is derived after deducting the value of SIP that were stopped.
In December, SIP investors pulled out money from across schemes. The SIP inflow in equity and growth oriented schemes was at ₹14,551 crore and net inflow was ₹5,078 crore last month leading to net outflow highest outflow of ₹9,473 crore.
Similarly, hybrid schemes witnessed an outflow of ₹696 crore while debt and other schemes saw an outflow of ₹479 crore and ₹425 crore. Solution oriented schemes recorded an outflow of ₹67 crore.
Weak yearly trend
The net SIP inflows have fallen 15 per cent in last one year to ₹6,469 crore last month from ₹7,649 crore logged in last January. It had touched a high of ₹9,058 crore in November and low of ₹5,494 crore in July last year.
In 2023, the overall net SIP inflow of ₹85,871 crore accounted for 47 per cent of gross inflow of ₹1.84 lakh crore as investors turned tactical by booking profit whenever market touched a new high and pumped in when it fell.
Kavitha Narayan, Vice President & Head - Research & New Initiatives, Capricorne Mindframe said a relatively tighter liquidity situation for some investors, especially buoyed by the increased traction in IPOs and obligations towards meeting advance tax liability have led to drain in mutual fund investments.
The markets have also been witnessing an increased profit booking on account of the recent volatility and expectations around the elections are impacting broader markets, she said.
Though the new SIP account being added has increased in last few months, the average size of SIP has fallen to ₹2,294 a month in November from ₹3,159 in December 2018
Girirajan Murugan, CEO, FundsIndia, said in tandem with India’s ascent to becoming the third-largest economy, it is emphasized that retail investors adhere to their SIPs for extended periods, preferably fiveto sevenyears, to optimise wealth accumulation. Diversification of investments is advocated to mitigate overall portfolio risk and enhance returns, he said.