Buoyed by bullish market sentiment, inflows through systematic investment plan into mutual fund schemes is all set to scale a new high with investment through this route already crossing the magical ₹1 lakh crore mark in the first 11 months of 2021.

Investment through SIPs has increased 17 per cent to ₹1.05 lakh crore till November last year against ₹90,572 crore logged in same period previous year.

The same was up 14 per cent when compared to the pre-Covid level of ₹92,113 crore logged in the first eleven months of 2019.

Though Association of Mutual Funds in India does not give scheme-specific data on SIP inflow, anecdotal evidence points to the fact that over 90 per cent of SIP inflows are into equity schemes across different categories.

Chandresh Nigam, Managing Director, Axis Asset Management said despite spending a major part of the last two years under lockdown and all the hardships, the industry is on a new high having geared-up for well-developed digital channels and a better customer experience.

Passive strategies

In the new normal, investors' attitude towards wealth creation has evolved. While actively managed funds will continue to remain significant, there has been a growing acceptance of passive investment strategies, Nigam said.

Equity markets last year saw a roller coaster ride driven by global tailwinds and rising favour for the India growth story. Amid turbulence in the rest of the emerging markets, India stood out as a favoured destination for global investors.

Riding on recovery

Along with strong investment by retail investors through mutual funds, foreign portfolio investors also pumped in huge amounts of money to ride on the strong signs of recovery in Indian economy.

The unabated rally in the secondary markets also aided new age businesses tapping the primary market. For the first time in four years, primary markets registered the highest number of IPOs with marquee unlisted names transitioned to the capital markets. Interestingly, private equity and venture capitalists made strong exits underscoring the potential in this space.

Amid all the ‘gloom, boom & doom’ the S&P CNX Sensex has given a return of 22 per cent last year, gaining a whopping 10,385 points. The broader markets have performed even better with BSE Midcap & Small Cap returning 37 per cent and 61 per cent respectively as of December -end.

Sorbh Gupta, Fund Manager- Equity, Quantum Mutual Fund said investors should not be unnerved by the near-term volatility but steadily move towards their optimum equity allocation through SIP. Any sharp correction due to near-term headwinds can offer additional valuation comfort and should be used to allocate more to equities with a long-term perspective, he added.

Santosh Kumar Singh, Head of Research, Motilal Oswal Asset Management Company said the year has started of with an expectation of tightening liquidity, increasing interest rates and uncertainty around Covid still remaining.

While on the brighter side, he said economy is showing strength and the corporate earning cycle is on an uptrend. With two opposing themes playing around, markets are going to be more range bound with select sectors standing tall.