Equity Mutual Funds See Inflows For Eighth Month, SIPs Hit A New Record

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Equity mutual funds witnessed fewer investments than the preceding month in October as the record run in India’s stock market paused.

Net inflows into equity and equity-linked schemes fell 40% month-on-month to Rs 5,214.8 crore in October, according to data released by the Association of Mutual Funds in India. Still, that’s the eighth straight month of investments into stock plans.

This comes as the domestic stock market corrected in October after outperforming other emerging-market peers for several months amid the Covid-19 pandemic. The NSE Nifty 50 and S&P BSE Sensex gained close to 0.7% during the month compared with a 2.8% rise in September.

Category-Wise Trends

All segments witnessed inflows in October.

While investors pumped money into mid-cap funds for the eighth month in a row, inflows into small-cap schemes resumed after two months.

Large- and multi-cap funds saw net investments for the second consecutive month.

AMFI started offering granular data since April 2019.

SIP Flows

Monthly contributions into systematic investment plans rose for the sixth straight month to a fresh all-time high in October.

SIP contributions, AMFI said, stayed above Rs 10,000 crore for the second month in a row.

Around 36 lakh SIP accounts opened in October, also a record, the mutual fund lobby said in a press release. SIP assets under management breached Rs 5.5 lakh crore during the month.

“It is heartening to see investors sticking to making matured choice by opting for schemes that offer prudent mix of debt and equity through balanced advantage schemes, flexi-cap schemes, and choosing mutual funds as an investment for long-term financial planning,” AMFI Chief Executive NS Venkatesh said. “This is quite evident from monthly SIP contribution getting consolidated at a record high.”

Net Flows

All mutual fund schemes, debt or equity, saw a net inflow of Rs 38,275.1 crore in October compared with an outflow in September. That’s the biggest since July this year.

Average assets under management also peaked at Rs 38.2 lakh crore.

Liquid funds, used by companies to park short-term cash, witnessed outflows for the second straight month.

Overnight funds saw a net inflow of Rs 6,337.2 crore in October compared with an inflow of Rs 16,312 crore in the preceding month.

Investors piled into credit risk funds for the sixth straight month, albeit at a slower pace.