sips: playing smart! Mutual fund investors have made huge gains but have raised the stakes in SIPs | Jobs Vox


New Delhi: When FII dollars started flooding Dalal Street in November, what did mutual fund investors do? They seem to have done smart by taking some profits off the table, but they haven’t forgotten about the time-tested formula of panicked long-term returns.

Mutual fund industry data showed that equity funds, including ELSS and index funds, rose 53.1% month-on-month (MoM) to Rs 28,400 crore in November. But the monthly SIP contribution rose to a new high of Rs 13,306.49 for the month.

“Retail investors have improved over a period of time. They believe in booking profits when markets are at highs and at the same time entering on every dip. Indian markets have been strong and have ignored the global pessimism,” said Manish P. Hingar of Finto, a financial advisory platform.

Industry experts say the broader market underperformed as retail investors took profits in large-caps and moved into mid- and small-caps.

“The November data shows that the large category witnessed redemptions of Rs 1,038 crore on the one hand, while the mid-cap category saw inflows of Rs 1,176 crore and small-cap funds received Rs 1,378 crore,” Samco Mutual Fund CEO Viraj Gandhi said.

Index funds and ETFs have been witnessing steady inflows, indicating that investors may be moving towards passive funds as opposed to active funds in the large-cap segment.

Due to heavy redemption pressure, net inflows into equity mutual funds recorded a record high of 76% MoM at Rs 2,258.35 crore in November and Rs 9,390 crore in October.

Suresh Soni, CEO, Baroda

Mutual funds, he said the mutual fund industry is seeing continued demand from long-term funds and people buying through SIPs. “There may be slight differences at the MoM level but the broader picture is of strong growth and consistent flows in the Indian mutual fund industry,” he said.

(Disclaimer: The advice, suggestions, opinions and views given by the experts are their own. These do not represent the views of The Economic Times)


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