Systematic Investment Plan (SIP) inflows surged past the Rs 23,000 crore mark for the first time, reaching Rs 23,332 crore in July, according to the latest data from the Association of Mutual Funds in India (AMFI). This represents a 10% increase from June's Rs 21,262 crore.
Despite the rise in SIP investments, overall equity mutual fund inflows saw a 9% decline in July compared to the previous month. The total assets under management (AUM) for mutual funds, however, grew by 6%, climbing to Rs 64.69 lakh crore in July from Rs 60.89 lakh crore in June.
The decrease in net inflows for equity mutual funds was evident, while debt mutual funds experienced positive inflows. Sectoral funds, which had enjoyed rising inflows for three consecutive months, saw an 18% drop in July. The category attracted Rs 18,386 crore in July, down from Rs 22,351 crore in June.
Among the 16 categories of debt mutual funds, 12 recorded inflows in July. Categories that saw outflows included medium duration funds, credit risk funds, banking & PSU funds, and gilt funds with 10-year constant maturity. Liquid funds led the inflows, attracting Rs 70,060 crore in July, a significant turnaround from the Rs 80,354 crore outflow in June. Money market funds followed with Rs 28,738 crore in inflows. Conversely, credit risk funds suffered the highest outflows, amounting to Rs 542 crore.
"We feel retail investors are now understanding that volatility is part of the long-term wealth creation journey. The share of financial assets has been increasing rapidly, and within financial assets, the mutual fund market share is relatively high. Mutual funds play a key role in enabling wealth creation for individual investors and providing tools for long-term financial planning. I am confident that the mutual fund industry will surpass the milestone of a trillion AUM and 100 million investors in the next three to four years," said Hitesh Thakkar, Acting CEO of ITI Mutual Fund.
Manish Mehta, National Head of Sales, Marketing & Digital Business at Kotak Mahindra AMC, added, "Net equity flows were slightly lower compared to June. The inflow could be attributed to new fund offers (NFOs) and SIP investments. Most lump sum purchases appear to be through the NFO route."
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