SIP contribution crosses Rs 1 trillion in FY24

Large-cap equity funds recorded net inflows of Rs 723.8 crore in October, after five straight months of net outflows, according to data released by the Association of Mutual Funds in India (Amfi). In April, the category had seen Rs 52.6 crore in net inflows.

“The large-cap category witnessed a noteworthy resurgence, reflecting broader market recovery,” said NS Venkatesh, CEO of Amfi.

It touched an all-time high yet again, at Rs 16,928 crore. Total contributions in FY24 so far have already crossed the Rs 1-trillion mark. However, The total SIP AUM (assets under management) dipped to Rs 8.6 trillion as of October-end, compared to Rs 8.7 trillion at September-end.

“The record high SIP contribution is reflective of the confidence of investing in equities through this route, which has been on the rise and has been performance-agnostic. It also helps build portfolios during such volatile times,” said A Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC.

Open-ended equity schemes saw net inflows of Rs 19,957 crore, up 41% from the Rs 14,091 crore in September. All equity categories saw net inflows during October. Inflows into small-cap and mid-cap funds remained robust at Rs 4,495 crore and Rs 2,408 crore, respectively, despite various fund houses restricting flows into small-cap funds. Venkatesh pointed out that investors should be cautious when investing in the small-cap category and undertake due diligence before investing at these levels.

Among others, the multi-cap category also recorded Rs 2,911 crore. Sectoral/thematic funds saw net inflows of Rs 3,896 crore, while flexi-cap also saw strong inflows of Rs 2,168 crore.

Meanwhile, open-ended debt schemes saw Rs 42,634 crore in net flows, spurred by close to Rs 33,000 crore in liquid funds. The money market category also saw Rs 6,248 crore in net inflows.

Interestingly, both the corporate bond and Gilt fund categories saw close to Rs 2,000 crore in net flows.

“Despite peaking interest rates, there was a notable surge in money market investments. Investors also exhibited optimism in Gilt funds. Strong inflows into debt schemes could be attributed to investors’ confidence that interest rates have peaked and this is the ideal time to enter fixed income,” said Venkatesh.

Hybrid funds continued to show resilience, with arbitrage funds (Rs 5,523 crore) and multi-asset allocation funds (Rs 2,410 crore) leading the way.

“This trend reflects the prevalent risk-off sentiment, with investors seeking to diversify their investments while maintaining a focus on capital protection. SIPs now account for a larger part of inflows (vs one-time investments) and are more structural. This provides the market with a lot of strength,” said Akhil Chaturvedi, Chief Business Officer of Motilal Oswal AMC.

Index funds (Rs 2,088 crore) and ETFs (Rs 4,769 crore) continued to shine, while Gold ETFs saw a surge in investments to Rs 841 crore, remaining a safe haven in light of the geo-political tensions and falling prices.

The industry’s net AUM stood at Rs 46.7 trillion as of October 31 (Rs 46.6 trillion in September), while the average AUM for the month was Rs 47.8 trillion (Rs 47.9 trillion in September).