Mutual fund monthly SIP inflows, AUM fall a tad in September; but SIP folios rise MoM

Monthly contributions via systematic investment plans (SIP) in September has remained more or less stable compared to the last two months. Inflows for the same in September was Rs 7,788 crore, down marginally from Rs 7,792 crore in August and Rs 7,831 crore in July.

Assets under management (AUM) of mutual fund companies that have come through the SIP route fell marginally to Rs 3.35 lakh crore in September from Rs 3.36 lakh crore in August.

This data was shared by NS Venkatesh, CEO, Association of Mutual Funds in India, in a conference call held to discuss AMFI’s monthly numbers.

Most experts feel a lot of investors must have not renewed their SIPs due to the uncertainty in the market.

The silver lining is that the mutual fund industry added new SIP accounts in September. Currently, mutual funds have about 3.33 crore SIP folios through which investors regularly invest in schemes. In August, the total SIP folios were 3.3 crore.

Overall, net AUM of the 42-player mutual fund industry fell to Rs 26.85 lakh crore in September from Rs 27.49 lakh crore a month ago.

What is SIP?

SIP is an investment route offered by mutual funds through which one could invest a fixed amount in a mutual fund scheme periodically at fixed intervals – say once a month — instead of making a lump-sum investment.

An SIP instalment amount can be as small as Rs 500 per month. SIP is similar to a recurring deposit where you deposit a small/fixed amount every month.

It is a very convenient method of investing in mutual funds through standing instructions to debit your bank account every month, without the hassle of having to write out a cheque each time.

SIP has been gaining popularity among Indian MF investors as it helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.

SIPs help the investor average his cost over a period of time, fetching more units when prices are low and fewer units when prices are high.