Comments
Notwithstanding the record Systematic Investment Plan (SIP) inflow into the mutual fund industry, the number of SIP discontinued or redeemed has increased last month due to investors’ concern over market valuation.
A large number of investors are using the ‘pause’ option introduced during the peak Covid times to stop their investment temporarily. The Association of Mutual Funds in India (AMFI) considers a SIP as discontinued if an investor pauses the instalment continuously for three months.
The number of SIPs discontinued or matured increased 7 per cent to 14.19 lakh last month against 13.21 lakh logged in April, as per the AMFI data.
New SIP
On the other hand, the new SIP registered was up 26 per cent in the same period to 24.70 lakh (19.56 lakh) as the industry attracted new investors from smaller cities.
The inflow through SIP last month hit a new high of ₹14,749 crore against ₹13,728 crore registered in April as the last two days of April being holidays, deductions spilled over to next month.
The assets managed under SIP increased 5 per cent to ₹7.53 lakh crore (₹7.17 lakh crore).
Also read: MFs equity mop-up drop 12% in last five months as investors turn wary over valuations
Gopal Kavalireddi, Vice-President (Research), FYERS said SIP inflows are back above the ₹14,000 crore-mark after a brief dip in April, with investors continuing their disciplined investing that started more than two years ago.
Investors should continue with their equity investments through systematic investment plans which offer the advantage of rupee cost averaging and countering the market volatility, he said.
With RBI projecting GDP growth of 6.5 per cent and inflation trending down from its peak levels, the prospects are bright for the Indian economy, he added.
The pause button for SIP was introduced during Covid as most investors were losing their jobs and were discontinuing their monthly investment altogether, said a mutual fund CEO.
Without the pause option, it would have become very difficult for the industry to get the investors go through the entire process of signing up for new SIP all over again, he added.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.