MUMBAI: Despite a heavily bleeding market, which towards the end of the month was as bad as the Covid-hit March 2020, inflows through the systematic investment plans (SIP) route hit a new high in July at Rs 28,464 crore, up 4% from 27,269 crore in June, and so did equity funds which saw a whopping 81% more inflows, making it the highest ever.
Inflows have been more broad-based across most equity categories, signalling renewed investor appetite after a relatively moderate June. Equity flows saw a record high increase of 81% on-month to Rs 42,702.35 crore from Rs 23,568 crore in June, marking the 53rd straight month of positive flows into equity schemes, according to the latest data release from the industry lobby Amfi on Monday.
Announcing the numbers, Venkat N Chalasani, the chief executive of Amfi, told reporters, "The total assets under management grew by 1.3% to Rs 75.36 trillion, despite pressures from strong dollar and persistent foreign fund outflows. This is a testament to sustained investor confidence and disciplined participation."
He added, “Equity funds saw the highest-ever monthly inflow of Rs 42,702 crore, with DIIs maintaining strong support. SIP contributions hit a new record of Rs 28,464 crore, and contributing accounts grew 5.4% to 9.11 crore, a clear evidence of disciplined investing even amid volatility.”
While the SIP inflows in July increased 4% to Rs 28,464 crore from Rs 27,269 crore in June, the total assets under management of the industry rose 1.27% to Rs 75.35 trillion from Rs 74.4 trillion in June, Rs 72.20 trillion in May, and Rs 69.99 trillion in April, reflecting steady growth and increasing investor interest.
The continuing investor interest in SIPs has seen the number of SIP accounts rising to 9.45 crore from 9.19 crore in June, with 68.69 lakh new SIP registrations in the month, while 43.04 lakh accounts were closed or matured.
According to Amfi, the number of contributing SIP accounts increased from 8.64 crore in June to 9.11 crore in July, an addition of 47 lakh accounts. However, SIP assets under management declined to Rs 15.19 trillion down from Rs 15.31 trillion in June, with SIPs accounting for 20.2% of the mutual fund industry’s total assets.
The SIP stoppage ratio, a key metric defined as the number of SIPs discontinued as a percentage of total new registrations, rose to 62.7% in July from 56.1% in June, but far lower than the spike of nearly 300% seen in April. A lower stoppage ratio suggests that a larger share of investors are continuing with their SIPs.
On the continuing growth in SIPS, Rohit Sarin of Client Associates said the substantial share underscores how SIPs have fundamentally transformed the investment landscape, effectively replacing traditional post office small savings schemes as the preferred vehicle for systematic wealth creation across urban and rural markets.
He further noted that SIP flows have demonstrated remarkable resilience, maintaining their upward trajectory independent of short-term market movements. "The 61.91 lakh new SIP accounts alone reflects a structural shift in household savings behaviour. Unlike episodic lump-sum investments that fluctuate with market sentiment, SIP contributions have maintained their secular growth pattern, with total outstanding SIP accounts reaching 919.32 lakh by June, indicating that investors now view equity markets as a legitimate long-term wealth creation avenue rather than a speculative instrument," he said.
A total of 30 new fund offers were launched in the reporting month which collectively raised a total of Rs 30,416 crore. Of these, 10 equity schemes garnered a total of Rs 8,997 crore, five debt schemes raised Rs 18,948 crore, two hybrid schemes raised Rs 1,887 crore and six other schemes mopped up Rs 584 crore.
Inflows into small cap funds touched Rs 6,484 crore from Rs 4,024 crore. Likewise, inflows into mid cap funds hit Rs 5,182 crore, 38% higher than the corresponding figure in June and inflows into large cap funds reached Rs 2,125 crore, up 25%.
When it comes to hybrid funds, multi asset allocation funds saw an inflow nearly doubling to Rs 6,197 crore from Rs 3,210 crore in June; dynamic asset allocation funds on the other hand saw an inflow of Rs 2,611 crore from Rs 1,885 crore. But arbitrage funds saw inflows more than halving to Rs 7,295 crore from Rs 15,584 crore.
Himanshu Srivastava of Morningstar India said equity-oriented funds saw a record-breaking performance in July garnering net inflows of over Rs 42,702 crore, the highest-ever monthly tally for the segment. This was a sharp rise from Rs 23,587 crore in June underscoring a clear resurgence in domestic risk appetite.
Meanwhile, debt funds saw Rs 1.07 trillion in net inflows in July, led by liquid, money market categories, taking the AUM to Rs 1.25 trillion from the previous month.
Debt-oriented mutual funds posted a sharp recovery in July, reversing the outflows recorded in the previous month. Income/debt-oriented schemes saw net inflows of Rs 1.07 trillion in July, compared to an outflow of Rs 1,711 crore in June and inflows of Rs 1.20 trillion in July 2024.
Liquid and money market funds drove the turnaround with liquid funds getting in Rs 39,355 crore as against an outflow of Rs 25,196 crore in June, though lower than the Rs 70,061 crore inflows in July 2024, and money market funds seeing inflows of Rs 44,574 crore, up from Rs 9,484 crore in June and Rs 28,738 crore a year earlier; overnight funds reported Rs 8,866 crore as against an outflow of Rs 8,154 crore and inflows of Rs 4,452 crore in the year-ago period.