This Financial Year, Mutual Fund Inflows via SIP are Expected to Reach Record Highs

Despite market turmoil caused by the Russia-Ukraine conflict, inflows into mutual funds through systematic investment plans are expected to hit a new high this financial year, despite global economies still recuperating from the Covid epidemic.

Steady Ascent

SIP inflows into mutual funds increased by 29% in the first 11 months of current financial year to 112,238 crore, compared to 86,898 crore in the same period previous year.

So far this financial year, the average SIP inflow has climbed to $9,353 crore, up from $7,241 crore previous year.

New Folios are Available

As of January 31, SBI Mutual Fund, the country’s largest fund house, has registered over 30 lakh new SIPs, a 39 percent increase over the previous financial. In the current financial year, the fund house got an average monthly SIP flow of over 1,800 crore, with an average ticket size of around 2,500.

“Over 50% of our SIP comes from tier-II and tier-III,” Singh added, “supported by a solid banking distribution channel and a multi-fold rise in investor trust following their experience in the last 3-4 years.”

In the same way, Nippon India MF SIP inflows jumped 14% to 2,010 crore in the December quarter, compared to 1,770 crore the previous year.

According to Manish Kothari, co-founder and CEO of ZFunds, there are signs of a strong increasing trend in SIPs in equities mutual funds, which is projected to continue despite a minor drop in February due to a reduced number of days.

He claims that investors in smaller towns are drawn to MFs because they are becoming more aware of the prospect of investing as low as $100 per month.

According to Ujjwal Jain, CEO and Founder of WealthDesk, the drop in SIP flows last month must endure for at least 2-3 quarters to be considered a definite trend, and there is no compelling reason for inflows to taper because domestic growth prospects remain robust despite global concerns.