After six months of continuous decline, investment in mutual funds through SIPs rose to Rs 7,800 crore in October indicating a return to normalisation for the retail investor. However, the increase in SIP numbers "may induce many to profit booking, as we are seeing in November equity flow preliminary numbers", said Gautam Kalia, head (investment solutions) at Sharekhan by BNP Paribas.
The industry raised Rs 7,800 crore through the SIP route last month, compared with Rs 7,788 crore garnered in September, data from the Association of Mutual Funds in India (Amfi) showed. This was the first increase in Systematic Investment Plan (SIP) inflows since March this year.
With the latest figures, the inflow through the route had reached to Rs 55,627 crore in the first eight months of the current financial year 2020-21. "While the month-on-month increase is marginal, it may be an indication to a return to normalisation for the retail investor.
"The recent spurt in equity markets may also instil more confidence in retail investors who will see their SIP investments show higher returns in their statements," Kalia said. Considering the fact that economy is slowly reviving and job market is also reaching pre-COVID-19 levels gradually, FYERS Head (Research) Gopal Kavalireddi said investors are resuming their investments, which was either paused due to paucity of funds or withdrawn to meet expense.
Further, fund collection through SIP was Rs 7,791 crore in August, Rs 7,831 crore in July, it dropped below the Rs 8,000-crore mark in June to Rs 7,917 crore. It was at Rs 8,123 crore in May, Rs 8,376 crore in April and Rs 8,641 crore in March. A total of 11.27 lakh SIPs were registered in October, while 7.87 lakh were discontinued or whose tenure completed, taking the net addition to 3.4 lakh for the month.
Currently, mutual funds have over 3.37 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes. SIP is an investment plan offered by mutual funds, wherein one can invest a fixed amount.