Robust inflows take SIP share of MF assets to record in November

The share of mutual funds (MF) linked to systematic investment plan (SIP) category in the total MF assets under management (AUM) reached a record 17% in November 2022, the data from AMFI showed. It has expanded for eight months in a row and stays above the long-term average share of 11.7%.

The AUM of the SIP funds and that of the total MF industry was at a record high of Rs 6.8 lakh crore and Rs 40.4 lakh crore in November respectively. The SIP flow has grown at a faster clip over the past few quarters. As a result, the SIP AUM grew by 35% annually in the past two years compared with 16% growth in the total MF AUM.

The net inflow in equity funds dropped to a 21-month low of Rs 2,258 crore in November amid rising concerns over rich valuations. A sustained momentum in the SIP inflow suggests an elevated level of redemption pressure from lump sum investors, particularly from high networth individuals (HNIs) who booked profits as benchmark indices traded near record high levels.

SIP-linked funds recorded an inflow of Rs 2.6 lakh crore over the past two years. The monthly SIP book reached a new high of Rs 13,306 crore in November. According to industry estimates, about 90% of the SIP linked funds are deployed in equity funds. A sustained inflow catapulted equity funds holding in the total MF AUM to a record 38%, a gain of 10% in the past two years.