MF industry adds Rs 7727 cr to SIP kitty in September

MF industry adds Rs 7727 cr to SIP kitty in September
  • 2

New Delhi, Oct 11: Systematic investment plans (SIPs) have been the saving grace for the mutual fund industry amid market volatility. Despite sharp fall in the equity market during September, the 41-member-strong MF industry has managed to garner Rs 7,727 crore through SIPs.
Fund managers said investors have continued to keep faith in SIPs during volatile markets. At the same time, they fear investors might discontinue SIPs after looking at negative returns.
The total SIP contribution in the first half of FY19 stood at Rs 44,487 crore, compared to Rs 29,266 crore in year-ago period and Rs 20,150 crore in the first six months of FY17.
A more than 2,500-point Sensex fall last month, precipitated by the IL&FS crisis, took a toll on equity mutual funds with all categories of schemes barring one clocking negative returns.
The S&P BSE Sensex lost more than 2,400 points in September — the worst fall in the month of September since 2008. The Sensex had fallen by about 10 percent in September 2008.
Trade war woes, rising global crude oil price, which breached USD 83 per barrel level, rupee falling to nearly 73 against the US dollar, liquidity concerns in NBFCs, a hike in interest rates by US Fed rate, and rising concerns around weak macros are some of the factors which took a toll on markets.
Generally, SIPs are the preferred route for retail investors to deploy money in mutual funds as it helps them reduce market timing risk.
Going by AMFI data, in the past three-four years, SIPs have risen particularly after equity markets touched a new high.
In FY17, total SIP contribution in the industry was Rs 43,921 crore and rose to Rs 67,190 crore in FY18.
Currently, fund houses have about 2.44 crore SIP accounts through which investors regularly invest in mutual fund schemes.