135167In view of reduced inflation and expenses, will it be right to invest in IT stocks?

People often invest their income in mutual funds, but, they will earn better returns only when they give sufficient time to their investment. In the case of mutual funds, staying invested for a long time is essential because it provides the tremendous benefit of compounding. Mutual funds have delivered excellent returns to investors in recent days. However, many people have not fully benefited from it because they have exited too soon.

According to a recent report of the Association of Mutual Funds in India (AMFI), as quickly as people are investing in mutual funds in India, they are also withdrawing  just as fast. Looking at the figures for the financial year 2023-24, the number of investors investing through SIP in mutual funds has increased by 28 percent. Meanwhile, a growth of 54 percent has been observed in SIP withdrawals.

Increased Closure of Accounts:

According to the report, during 2023-24, people withdrew Rs. 11 lakh crore through SIP, whereas this figure was Rs. 72,100 crore in 2022-23. Due to this, the growth of investments coming into mutual funds through SIP has been very modest. However, 4.28 crore SIP accounts were registered in FY24, which is 71 percent more than FY23. But on the other hand, 2.24 crore SIP accounts were closed. This figure is 56 percent higher than in the financial year 2023.

Looking at the figures of FY24, a total of Rs. 20 lakh crore has come into mutual funds through SIP, whereas only Rs. 16 lakh crore came through SIP in the previous year. If we only look at the growth of SIP, the net SIP growth in 2023-24 has been 4.9 percent. In FY24, people invested Rs. 87,971 crore through SIP, while this investment was Rs. 83,873 crore in 2022-23.

What do experts say?

SEBI registered investment advisor Jitendra Solanki says that mutual funds have given strong returns in the last one to two years. Seeing such substantial returns, people are withdrawing money. Young investors are withdrawing from mutual funds seeing significant profits in the short term, but this is not the best way of investment. If you invested in mutual funds with a specific goal and will need the money after one to two years, it is better to withdraw from small or mid-cap funds and secure it in a debt fund. If your goal is 10 to 15 years away, it is better to stay in the right fund.