Mutual fund SIPs touch record high in August, RBI's CRR move impacts debt AUMs: AMFI

Investors poured in a record Rs 15,813 crore in August through systematic investments plans (SIPs) route offered by mutual fund players, an industry body said on Monday.

The Association of Mutual Funds in India (Amfi) also said there was a net outflow of Rs 25,872 crore from the income or debt-oriented schemes in August.

Its chief executive N S Venkatesh told reporters that the Reserve Bank's incremental cash reserve ratio (CRR) measure to suck out excess liquidity “partially impacted” the industry's performance on the debt side as such schemes are looked at more from a treasury management perspective by banks as well.

The previous monthly high of SIPs inflows was Rs 15,244 crore in the preceding month of July. Venkatesh said the overall assets under management (AUM) for SIPs were Rs 8.47 lakh crore at the end of August and a record 35 lakh new SIPs were started in the month.

Venkatesh said the record high SIP flows suggest that retail investors continue to invest in the market, and added that he expects the same trend to continue in the future as well on factors like strong economic growth which will help market sentiment.

The overall AUM for retail investors' bets on equity and hybrid schemes was at Rs 24.38 lakh crore across 12.30 crore portfolios as at end-August. There was also a record 19.58 lakh SIPs discontinued or matured in August, Venkatesh said, adding the same stood at over 17 lakh in July.

The MF industry's overall AUM grew to Rs 46.93 lakh crore in August, as against Rs 46.37 lakh crore in July.In an SIP, an individual invests at periodic intervals like once a month starting from Rs 500 onwards. The 43-player industry has a high reliance on SIP flows.

Meanwhile, Venkatesh said the dip in debt AUMs does not point to any trend as it can be the result of the ongoing treasury operations.  There was a Rs 348 crore fall in large cap schemes' AUMs, Venkatesh said, adding that he expects a reversal in it soon and the same will be driven by higher earnings growth.

He asserted that the continuing interest in small and mid-cap equity schemes – they showed growth of Rs 4,264 crore and Rs 2,512 crore, respectively in August – is not an “irrational exuberance” by investors, and pointed out to a 60 per cent dip in asset prices which investors seem to be looking at while taking their calls.

In a first in many months, gold exchange traded funds (ETFs) saw an inflow of over Rs 1,000 crore, which was attributed by Venkatesh to investors taking advantage of a dip in bullion prices lately. ndustry players launched a total of 14 new fund offerings in August, through which they mobilised Rs 7,531 crore, as per the Amfi data.

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