Last week, SEBI Chief Ajay Tyagi said that net SIP inflows of the MF industry was less than Rs.3000 crore per month between November and January 2021.
Speaking at the SEBI-NISM conference, Tyagi said,” Monthly SIP inflows into growth/equity schemes of mutual fund averaging around Rs.5600 crore in FY 2019-20, initially increased to Rs 6200-6400 crore in April-May 2020 but since then has been almost consistently falling every month. In the last 3 months, November 2020-January 2021, monthly SIP inflows have been less than Rs.3000 crore. This reducing trend could be indicative of a trend of individual investors using funds previously being dedicated for SIPs to invest directly into the market or in other assets such as debt/real estate or even possibly holding out in cash waiting for market correction.”
Clearly, SEBI’s latest data on SIP inflows show massive discrepancy in SIP inflows in the MF industry.
While AMFI data shows that the MF industry has received average monthly SIP inflows of Rs.7900 crore between November and January 2021, SEBI says that average monthly SIP inflows in the MF industry during the corresponding period was less than Rs.3000 crore.
While AMFI data reflects gross inflows in the MF industry through SIPs, SEBI calls such data as net SIPs. However, net SIPs are not calculated as gross inflows in SIPs minus outflows due to SIP discontinuation.
A senior MF official said that this discrepancy is due to differences in calculation methodology between AMFI and SEBI. “SEBI calculates this number based on the data received from registrar and transfer agents on its own. The market regulator simply deduct outflows from SIP accounts to arrive at the net SIPs. It is not gross SIP inflows minus outflows due to SIP discontinuation. Hence, this data may not reflect the exact picture,” he said.
Another senior official pointed out that while there has been differences in calculation methodology, it is a known fact that SIP discontinuation has increased this year compared to last year largely due to loss of income or job post covid-19. “Many middle class people have invested in mutual funds through SIPs. These people are still facing financial constraint due to reduced income.”
