Equity inflows surge even as markets stay flat
Shukla noted that equity indices delivered only 1–3% returns in November, yet SIP inflows rose by approximately ₹400 crore month-on-month. “Investors now understand that SIPs are a discipline—not a reaction to markets doing well. This month’s rise shows growing maturity,” he said.
While overall inflows look strong, Shukla flagged that the industry is awaiting the detailed break-up to assess net participation trends.
Rise in SIP cancellations needs watching
- One area of caution is the higher-than-usual SIP cancellations seen over the past two months.
- October: 60 lakh gross SIP registrations vs. 15 lakh net additions
- September: 57 lakh gross vs. ~13–14 lakh net additions
This implies a significantly large number of cancellations. Shukla said newer investors who witnessed short-term volatility may be exiting prematurely. “We need to see whether November continues this trend,” he added.
Gold fund inflows dip amid profit booking
Gold fund inflows, which had been strong for months, softened in November.
Shukla attributed this to profit booking and mixed sentiment on gold prices. “Some expect correction, others remain bullish, leading to a dip in flows,” he said.
Thematic fund frenzy continues, but risks remain
Thematic NFOs—across defence, consumption, passive and international themes—have drawn heavy inflows over the last two to three years. More than 100 such NFOs have launched in the past year alone.However, Shukla advised caution: “Unless the theme has a long runway, thematic funds should not form the core of a portfolio. A diversified fund can capture themes without concentration risk.”
He recalled how infra-themed funds surged in 2003–05 only to lose steam later.
Why midcap and smallcap flows are rising again
Despite middling performance over the last year, midcap and smallcap funds saw higher inflows in November.
Shukla said this aligns with broader economic expansion trends and the long-term SIP strategy.
“India’s growth isn’t fully represented by largecaps alone. Emerging sectors are found more in small and midcaps. SIPs, not lump sums, are the right way to participate,” he explained.
Overall investor sentiment remains strong
Shukla said the MF industry’s numbers reflect resilient sentiment and disciplined investor behaviour even in a consolidating market.“SIP flows nearing ₹30,000 crore is a terrific sign. As long as investors stay focused on long-term goals, the trends look healthy,” he concluded.