AUM of funds linked to SIP at record high despite moderating inflows

Though the monthly inflow in the systematic investment plans (SIP) has moderated, it has not deterred the growth in the size of the funds linked to the SIP investment. The assets under management (AUM) of the mutual funds linked to the SIP plans reached to Rs 3.4 lakh crore in August 2020. This was the highest level in four years or since the Association of Mutual fund of India started providing the data.

The share of the SIP AUM to the total mutual fund (MF) AUM rose to 12.2% in August 2020, around 250 basis points higher than the four-year average of 9.5%. The SIP AUM rose by 40% compared with the 23% increase in the total MF AUM from March 2020.

On the year-to-date basis, the SIP AUM increased by 6.1% till August thanks to capital appreciation and fresh inflow, albeit at a lower pace. The total MF AUM rose by 3.5% during the period.

The average value of the SIP portfolio reached Rs 1,01,677 in August 2020, the highest in the last eight months. It gained 32% since March 2020 and was 4.5% lower than the value of Rs 106,917 in January 2020.

The monthly SIP inflow moderated to Rs 7,792 crore in August 2020, the lowest in the past two years. The cumulative inflow from the SIP accounts was Rs 40,039 crore in the first five months of the current fiscal, compared with Rs1,00,084 crore in the previous fiscal year. The SIP book contracted in August for the fifth month in a row. The SIP discontinuance has been picked up in the past five months. A record 7.6 lakh accounts were discontinued in August.