Business

Investors covet strong SIPs mutual fund, inflows of more than ₹12k cr for 4 consecutive months

According to AMFI data, SIPs flow in August stands at a record high 12,693 crore vs 12,139 crore in July this year. SIP continues to gain more 12,000 crore inflows since May 2022.

SIP developed by 2,770 crore in August 2022 compared to the same period last year.

A year ago, investment in SIP was even less 10,000 crore. In August 2021, SIPs cash flow stands at 9,923 crore.

This shows that there has been significant growth in SIP investments.

SIPs are often considered a reasonable investment mechanism. An investor can invest with the lowest rate 500 on a monthly basis in SIP, however, the minimum amount varies in different mutual fund schemes. By choosing SIP, a fixed amount is deducted from your bank account monthly – this creates discipline in investing. You can easily get in and out of SIP. The only special feature of SIP is that they do not require too much money to invest, they can be chosen by anyone from teenagers to the elderly.

There is also a tax-free benefit of 1.5 lakh under section 80C of Income Tax, available under SIP.

On its website, Clear explains that every time you invest in a mutual fund program through SIP, you buy a certain number of fund units in proportion to the amount you invested. You don’t need to time the markets when investing through SIP because you benefit from both up and down market trends.

Furthermore, Highlighting when the market is down, you buy more units of the fund while you buy fewer units when the market is up. Since the NAV of all mutual funds is updated daily, the purchase cost may vary from SIP to batch. Over time, the average purchase cost goes down. This is called average cost in rupees. This benefit is not available when you make a one-time investment.

Swapnil Bhaskar, Head of Strategy at Niyo, said, “Investors don’t need to think about market fluctuations as the SIP roadmap averages investment prices over time. if not impossible,” reported PTI.

Most importantly, Bhasker added, it’s a great way for people to continue saving as a habit – which is especially important for millennials and GenZs who find it hard to save.

In August, the overall mutual fund industry attracted a stronger inflow of capital 65,077.46 crore — up 2.75 times from 23,604.92 crore last month. While debt-driven plans posted an inflow 49,164.29 crore compared to pure inflow 4,930.08 crore in July, inflows to equity-oriented programs fell 6,119.58 crore in August from 8,898.2 crore in July this year.

ICICI Direct in its latest report said, “Retail equity investors appear to be adopting a cautious stance as the market rebounds sharply from lows and trades near all-time highs. Cash flow in August 2022 is at its lowest level since September 2021.

The stock market traded volatile due to recession fears in the context of macroeconomics.

Meanwhile, at SIPs, a strong increase was recorded in August of new investors. For the first five months of FY23, outstanding SIP accounts stood at 57.16 crore compared with 52.77 crore in mutual fund schemes, according to AMFI data. New SIP accounts in August 2022 increased by 3.71 lakh to 21.13k new SIP compared to 17.42k new accounts in July.

SIP AUM is in 6.4 lakh crore at the end of August 2022, up 17% year-on-year and 5% month-on-month. Additionally, over the past 5 years, SIPs AUM has grown at least 30% year-over-year – twice as fast as the overall growth in the mutual fund industry’s asset base.

From April to August 2022, SIPs contribution is approx 61,258 crore for multi-function industry.

Overall, assets under management (AUM) hit a record 39,33,877.77 crore in August 2022 vs 37,74,802.90 crore in July 2022.

“SIP has gained popularity among Indian MF investors, as it helps in Rupee Cost Averaging and also in disciplined investing without worrying about market volatility. market and market timing,” the AMFI note said.

According to AMFI, SIP is an investment plan (methodology) offered by Mutual Funds in which a person can invest a fixed amount in a Mutual Fund Program periodically at regular intervals. fixed period – say once a month instead of a one-time investment. SIP installment amount can be as small as 500 per month. SIP is similar to a recurring deposit where you deposit a small/fixed amount monthly.

Furthermore, the mutual fund association adds that SIP is a very convenient method of investing in mutual funds through its standing guide to debit your bank account monthly without the hassle of having to write checks every time.

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