The Association of Mutual Funds in India (AMFI) on Monday released monthly data for the mutual funds industry. The statistics for August 2019 revealed, Systematic Investment Plans (SIPs) saw marginal decline in contributions, which according to N S Venkatesh, CEO, AMFI was not a considerable fall, it just shows the trend and reflects market turbulence.
In July 2019, the SIP inflows were Rs 8,324.28 crore, while SIP inflows in August were Rs 8,230.76 crore, which is a slight decrease, according to the AMFI data. It is a fall of just Rs 93.52 crore.
However, despite the fall in monthly contributions, the total Asset Under Management (AUM) of SIPs saw an increase. Total SIP AUMs in the month of August were Rs 2,71,104.77 crore as compared to Rs 2,68,863.92 crore in the month of July, the AMFI data revealed.
While releasing the statistics in a conference call, Venkatesh, said, “Retail Investor Interest in equity mutual funds, for the fourth time in succession, continues to be steady, displaying maturity, despite uncertain economic and volatile market situation. Net inflows, largely in all categories of Equity funds, especially in small and mid-cap funds, as also in ELSS segment, signifies heightened confidence and interest in emerging businesses and disciplined tax planning.”
On the outlook for September 2019, Venkatesh stated, “On the equity side, SIPs would continue to witness robust flows and on Debt side, liquid funds may see volatility owing to quarter-end phenomenon.”
Besides, total number of SIP accounts saw a marginal increase. As per the AMFI data, number of SIP accounts as on August 31 were at 2.81 crore while those in July were 2.78 crore. Suresh Sadagopan, Founder, Ladder7 Financial Advisories, says a drop of 93 crore which is merely a 1 per cent decline is not a significant fall. “The SIP contributions can keep going up and down here and there. If suppose the fall was of Rs 500 crore or Rs 800 crore then we would have said something was wrong,”Sadagopan said. He added that 1 per cent drop does not mean SIPs were losing their popularity among the investors. “We can’t say they are losing their popularity. The 1 per cent change really does not matter it only shows market turbulence. We have to see in the coming months if the trend is deepening. This is just a near blip.”
As the contributions from investors keep pouring in, they will definitely go up in the coming months unless too many people stopped doing SIPs, he concluded.