SIP collections drop to Rs 96,000 cr in FY21 amid pandemic-led disruptions

The Mutual fund industry saw its collections through SIPs dropping 4 per cent to Rs 96,000 crore in the 2020-21 fiscal, as COVID-19 induced lockdowns led to income uncertainty.

Going forward, success of the vaccination drive, better than expected economic scenario and higher incomes can be the factors that will have an impact on systematic investment plan or SIP flows, Gopal Kavalireddi, Head of research, FYERS, said.

   

While a few of the economic indicators like GST collections, auto and housing sales look positive, IIP and inflation data along with intermittent lockdowns can affect the economic progress in the ongoing fiscal, he added.

A total of Rs 96,080 crore was collected through SIP in just concluded fiscal, lower than Rs 1,00,084 crore garnered in 2019-20, as per the Association of Mutual Funds in India (AMFI).

Inflows into SIPs have averaged about Rs 8,000 crore for the 12 months till March this year.

Systematic investment plans or SIPs have been the the preferred route for retail investors to invest in mutual funds as it helps them reduce market timing risk.

The mutual fund SIP contribution has increased steadily over the years. From Rs 43,921 crore collected in 2016-17, Rs 67,190 crore in 2017-18, Rs 92,693 crore in 2018-19, the SIP contribution hit the Rs 1 lakh crore mark in 2019-20. Quantum Mutual Fund Chief Executive Jimmy Patel attributed the decline in SIP numbers to coronavirus-induced lockdown as several investors chose to stop their SIPs.

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