SIP Investments Cross Record Rs 20,000 Crore in April 2024

Overview: SIP Investments Hit New High

For the first time in history, monthly investments via systematic investment plans (SIPs) surpassed the Rs 20,000 crore mark, reaching a record Rs 20,371 crore in April. This significant achievement highlights the growing popularity of SIPs as a preferred method of investment in India.

AUM Rebounded Despite KYC Hurdles

The new know-your-customer (KYC) rules, which came into effect on April 1, caused confusion among investors and posed challenges for transactions. However, the industry rebounded strongly, with net assets under management (AUM) increasing during the month.

Net Flows Reflect Recovery

Net flows into mutual funds recorded a substantial inflow of Rs 2.39 lakh crore in April, driven mainly by debt schemes. This marked a significant turnaround from March, which saw an outflow of Rs 1.59 lakh crore due to seasonal factors. The expected impact from the KYC changes was mitigated as investors adapted to the new requirements, updating or redoing the KYC process with officially valid documents, especially Aadhaar.

Equity and Equity-Linked Schemes Face Decline

Despite the overall recovery in the mutual fund industry, net investment into equity and equity-linked schemes declined by 16% compared to the previous month. In April, the total net investment in these schemes was Rs 18,917.1 crore, according to data released by the Association of Mutual Funds in India (AMFI). This decrease could be attributed to market fluctuations and investor hesitation due to the KYC changes.

Category-Wise Trends: Small-Cap Funds Lead the Way

Looking at the fund categories, small-cap funds experienced a notable turnaround in April, registering inflows of Rs 2,208.7 crore compared with outflows of Rs 94.2 crore in March. This shift suggests a renewed interest in smaller companies with growth potential.

Mid-cap funds also saw increased inflows, receiving Rs 1,793.1 crore, up from Rs 1,017.7 crore in March. Multi-cap funds enjoyed a similar boost, with inflows rising to Rs 2,723.8 crore, compared with Rs 1,827.5 crore in March.

In contrast, large-cap schemes experienced a dip in inflows, bringing in Rs 357.6 crore in April, significantly lower than the Rs 2,127.8 crore inflows in the previous month.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.