For the first time in FY 2017-18, SIP inflows in mutual funds fell marginally, shows the latest AMFI data.
The mutual fund industry witnessed inflows of Rs.6,425 crore in February as against Rs.6,644 crore a month ago, a drop of Rs.219 crore.
The fall comes despite an increase in net inflows in equity funds. The net inflows in pure equity funds increased by Rs.1,279 crore to reach Rs.14,683 crore in February. However, balanced funds and ELSS funds showed marginal decline in net inflows in February.
Experts say that it is too early to attribute any reason behind the fall in the SIP contribution.
“The fall in the SIP contribution is just 3%, which I think is not a big fall. It might be due to knee-jerk reaction of few investors after the budget,” said Debashish Mohanty, Country Head, Retail Business of UTI Mutual Fund.
Seconding Debashish, Vishal Kapoor, CEO, IDFC MF, said, “February has been a volatile month both in the domestic and global front. The proposal of LTCG tax on equity funds caught many investors unprepared. This might have prompted new investors to remain on the sidelines until the volatility waned. Second, few investors might have also redeemed a part of their investment. However, it is too early to say anything; a minor detour of SIP contribution is not a matter of concern.”
On the other hand, the Head of Sales of a large foreign fund house pointed out that although there has been a fall in contribution, the industry added close to 7 lakh SIP folios.
The total SIP accounts stood at 2.05 crore, up from 1.97 crore folios in the preceding month. New SIP registration witnessed a marginal fall in February. More than 10.5 lakh new SIPs were registered while 3.21 lakh SIP folios were discontinued in February. In the preceding month, 12.94 lakh new SIP folios were registered and 3.26 lakh SIP folios were discontinued.
The SIP AUM in February was at Rs.2.01 lakh crore which is 9% of the overall MF AUM.
