Lumpsum flows in Mutual Funds slow down in November, but SIPs in high gear

For mutual funds, November told a tale of two extremes. For regular inflows into Mumbai’s money-management industry, it was the best of times: For equity funds, it was among the worst – at least in recent memory.

Inflows into equity schemes hit a 41-month low of Rs 1,312 crore, but monthly collections through systematic investment plans (SIP) hit an all-time high of Rs 8,273 crore. And these coincided with the two biggest equity indices hitting records.

“Investors are surrounded by a lot of negative news on the economic front. As the markets hit new highs, they thought it’s wise to book profits and take some money off the table,” said Swarup Mohanty, CEO, Mirae Asset Management.

In October, equity mutual fund schemes had seen inflows of Rs 6,026 crore. Inflows stood at Rs 6,609 crore in September and Rs 9,152 crore in August.

“The industry added 5 lakh SIP accounts in the month, the highest so far this year, which is a strong testament to the continued value retail investors see in building investments through SIPs,” said Vishal Kapoor, CEO, IDFC MF.

This is the 12th successive month in a row where SIP inflows remained north of the Rs 8,000-crore mark.

During the month, assets under management of the Indian mutual fund industry surged by Rs 54,419 crore to touch a high of Rs 26.94 lakh crore, aided primarily by inflows of Rs 51,427 crore into debt mutual fund schemes.

“Goal-based, long-term SIP investments from retail investors continue to grow steadily, with SIP AUM at an all-time high at Rs 3.12 lakh crore,” said N S Venkatesh, CEO, AMFI.

Balanced funds that invest 65-75% of their money into equities also saw huge outflows of Rs 4,932 crore.

“A year and a half ago, many investors bought balanced funds believing they will get monthly dividends of 8-12%. As markets fell, funds have lowered the dividend or skipped it, disappointing investors who are exiting such funds after holding them for a year,” said a Mumbai-based distributor.

Among debt funds, banking and PSU funds that primarily invest in a portfolio of AAA companies saw strong inflows of Rs 7,230 crore, higher than the previous month’s Rs 4,855 crore. Investors continued to shun credit risk funds with the category seeing outflows of Rs 1,898 crore.

Overnight funds saw inflows of Rs 20,649 crore as some corporate investors moved from liquid funds that now have an exit load for 7 days.

Arbitrage funds, which invest in a mix of shares and stock futures, continued to see inflows of Rs 5,353 crore as rich investors looking for cheaper valuations in equities parked surplus funds here. “This category continues to find favour with HNIs looking for steady net returns,” said Vishal Kapoor.


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