The fluctuating markets of late has not had any impact on the mutual fund inflow through systematic investment plan (SIP) as it increased by 7.5% in August 2019. Despite the market volatility, the SIP inflow has touched Rs 8,231 crore in the last month. This is a huge confidence booster for the mutual fund industry.
The August’s inflow has taken the SIP inflow between April and August to touch Rs 41,098 crore as against Rs 36,760 crore in the same duration in the previous year. As per the Association of Mutual Funds in India (AMFI), the inflow has increased by a whopping Rs 5,662 crore this FY.
The SIP route is the most preferred mode of investment as it allows investing small amounts periodically. Also, investing through SIPs help investors mitigate market volatility by timing the market. The kind of benefits that SIP offers has made millennials consider investing in mutual funds via SIP a viable investment option.
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However, the SIP inflow saw a small drop in the inflow in August as compared to the previous month. July 2019 recorded a SIP inflow of Rs 8,324 crore, June 2019 garnered Rs 8,122 crore, May 2019 amassed Rs 8,183 while Aprill 2019 gathered Rs 8,238 crore. The average SIP inflow has been about Rs 8,000 crore in the last 12 months.
SIP inflow is expected to increase on the equity front after September. Debt markets might see some volatility on the back of quarter-end formalities and might result in lesser SIP inflow towards debt funds. AMFI has taken up various campaigning activities, and it is interesting to see how the mutual fund industry fares in the days to come.
The SIP investment has been on the rise over the last few years. A massive Rs 92,700 crore was invested in mutual funds via SIP route in 2018-19. The FY 2017-18 recorded SIP inflow of Rs 67,000 while Rs 43,900 crore was pumped in during 2016-17 via SIP. A per AMFI’s data, there are 2.81 crore SIP accounts in India.
For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in
Engineer by qualification, financial writer by choice. I am always open to learning new things.
