After seven months, SIP inflows cross ₹8,000-crore mark in January

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In what could be a change in trend for the mutual fund industry retail investors are back through the systematic investment plan (SIP) route. Inflows in mutual funds via the SIPs stood at Rs 8,023 crore in January 2021, compared to Rs 8,418 crore in December 2020. While Association of Mutual Funds in India (AMFI) data shows the SIP was Rs 8,418 crore for December 2020, some market experts believe that SIP inflows stood below Rs 8,000 crore as the last three days of November 2020 were non-business days.

Amit Nanavati and Tanuj Kyal, research analysts, Nomura, in a report said, “While SIP flows for December did have some spill-over effect from November 20 (lesser working days), average SIP flows for November and December were at a run-rate similar to previous months at Rs 7,800-7,900 crore.”

On the SIP account front, 16.44 lakh new accounts were opened while 7.65 lakh accounts matured during the month of January 2021. In net 8.78 lakh, new SIP accounts were added in the month taking the total to 3.56 crore in January 2021 compared to 3.47 crore in December 2020.

Sunil Subramaniam, MD & CEO of Sundaram AMC said, “Retail investors are coming back as they observe that the news flows on the economy and on the covid front are getting better and they and the fact that the stock market indices have doubled since the March lows. The lockdown has also helped customers to get comfortable with digital modes of operations which has helped advisors to acquire more customers at a lower cost and a faster timeframe.”

The asset under management for SIP accounts declined from ₹3.90 lakh crore in January 2021 vs ₹3.98 lakh crore in December 2020.

Commenting on the data, NS Venkatesh, Chief Executive, AMFI said, “January 2021 saw measured maturity-driven redemptions led by smart, goal-based investing and the desire to book profits with equity indices reaching an all-time high. Inflows continued via the SIP route, as seen from the rising number of new SIP registrations coupled with robust monthly SIP contribution.”

“The last six months saw SIP numbers going down. But clearly, as the markets improved confidence has come back, I think the numbers will keep on going up from here,” said Hemant Rustagi, CEO, Wiseinvest Advisors.

Redemption from equity mutual funds was ₹9,253 crore in January, compared to ₹10,147 crore in December 2020 showed Amfi data.