Rs 13,573 crore invested via MF SIPs in Dec’ 22

CHENNAI: The systematic investment plans (SIP) of Indian mutual funds gathered Rs 13,573.08 crore from investors, up from Rs 13,306.49 crore invested in November 2022, the Association of Mutual Funds in India (AMFI) said on Tuesday.

Last month's SIP contribution was much higher than Rs 11,305.34 crore that was invested in December 2021.

"Investors will continue to invest in the India growth story through the mutual fund route over the near future. Investors are looking forward to a growth-oriented budget which should have a positive impact on the markets.

"The importance of investing in equity markets for the longer term goals is not lost on investors and the same is reflected in the ever-increasing awareness and adoption of SIP as a goal-linked route to create wealth over the long term. This month almost 24 lakh new SIPs were registered, which shows increasing investor belief in the instrument. SIPs are the simplest route to build a disciplined habit of regular investing," AMFI's Chief executive N.S. Venkatesh said.

According to the AMFI, the industry's net assets under management (AUM) at the end of December 2022 stood at Rs 39,88,735.37 crore (Rs 37,72,696.31 in December 2021) and the average AUM at Rs 40,76,170.53 crore.

The retail AUMs (Equity+Hybrid+Solution-Oriented Schemes) in December 2022 stood at Rs 20,55,212 crore and the average AUM stood at Rs 20,88,946 crore.

According to the industry body, the number of SIP accounts stood at 6,12,42,531 for the month of December 2022 by a net addition of 7,85,102 from the month of November which was at 6,04,57,429.

Mutual Fund folios have been continuously crossing the highest ever milestone since the last three months. This indicates a healthier and disciplined investment habit and systematic mode of investment by small investors, AMFI said.

"New SIPs added in Dec'22 is expected to be around 23 lakh, but the net addition seems around 7.85 lakh (month on month), suggesting SIP cancellation ratio at 66 per cent, a 25 month high. This is a reason of concern in the SIP trends that we are seeing. Though there were instances of lower net additions seen in some months even in the past, the overall trend seems to be getting stable," Sriram B.K.R., Senior Investment Strategist at Geojit Financial Services, said.

"Going forward, challenges would be on, above average redemptions induced either by profit booking or heightened volatility and cancellation of SIPs. Market falls or fluctuations for months in a row can be perplexing at times, but what we have seen in equities is that it rewards those with discipline and patience handsomely in the long term. Investors should continue their SIPs through the market volatility in order to reap the fullest gains of this whole systematic approach of investing in equities," he added.

The Index Funds have shown a net inflow of Rs 6,736.52 crore in the month of December 2022 as compared to Rs 8,601.73 crore in the month of November 2022