Equity mutual fund inflows rise nearly 72% in January on record SIP contributions, shows AMFI data
Over the past few years, retail investors have significantly increased their participation in the financial markets, particularly through mutual funds. This influx of capital has caused a noticeable surge in equity mutual fund investments.
The latest data from the Association of Mutual Funds in India (AMFI) shows inflows to equity mutual funds rose to Rs 12,546 crore in January 2023. This was a significant surge of 71.79% from Rs 7,303 crore in December 2022.
Although Foreign Institutional Investors (FIIs) remained net-sellers in January, the inflows into equity mutual funds were constant despite the volatility. The strong inflow numbers can be credited to the continuous and record Systematic Investment Plan (SIP) investments made by retail investors.
The monthly data shows that the SIP inflows in January rose to a record Rs 13,856 crore. This was for the fourth straight month that the SIP inflows were more than Rs 13,000 crore mark. Moreover, the number of mutual funds SIP accounts in January grew to more than 6.21 crore from 6.12 crore accounts in December 2022.
The data shows that 22.65 lakh new SIPs were added in the month of January, while the number of SIPs discontinued/matured stood at over 13.42 lakh. This led to a net increase of 9.23 lakh in just one month.
Investors had their funds invested in various categories with index funds leading the pack with Rs 5,813 crore inflows. This was followed by hybrid funds which saw inflows of around Rs 4,492 crore. Multi-asset and arbitrage funds saw inflows of Rs 2,182 crore and Rs 2,055 crore, respectively.
Contrary to equity mutual funds, debt funds saw a net outflow of funds to the tune of Rs 10,316 crore in the month of January. A net outflow of Rs 21,947 crore from these funds was witnessed in December 2022.
The mutual fund houses launched a total of 18 schemes during January. Of these, 12 were open-ended schemes and six were close-ended schemes, in various categories. These funds mobilised Rs 4,422 crore.
On the other hand, in January, Gold ETFs stood at Rs 21,835.92 crore.
Overall, the total Assets Under Management (AUM) of the mutual fund industry in India stands at Rs 39.62 lakh crore at the end of January, as per AMFI data.
The increased investor activity in mutual funds during volatile market conditions is a positive sign. It suggests that investors are becoming more confident about the markets amid improved sentiment. A sustained rise in SIPs shows investors opting for a disciplined approach of regular investing.
Even though the benchmark equity index Nifty has fallen more than a percent in 2023 YTD, the Nifty IT index has outperformed the benchmark by gaining around 10% this year.