Mutual fund's SIP investors redeemed over Rs 40K crore in H2CY22

SIP account redemptions were 36% higher than H1: Amfi

Mutual fund (MF) investors redeemed over Rs 40,000 crore from systematic investment plan (SIP) accounts in the last six months (second half, or H2) of Calendar 2022 (H2CY22). The figure is 36 per cent higher than the redemptions in the first half of CY22 - the period when SIP investors had taken out Rs 30,000 crore, reveals an analysis of data from the Association of Mutual Funds in India.

The redemptions were exceptionally high in November when benchmark market indices – the S&P BSE Sensex and the National Stock Exchange Nifty - had scaled fresh peaks.

Industry executives had attributed the high redemptions to profit-booking by retail investors.

According to MF distributors, the higher outflows from SIP accounts in H2CY222 were also a result of festival spending and apartment bookings.

While redemptions fluctuated right through CY22, gross SIP investments rose steadily through the year, from Rs 11,500 crore in January to Rs 13,570 crore in December.

On the whole, gross SIP investments stood at Rs 1.5 trillion last year. Net SIP investments came in at Rs 78,700 crore - 53 per cent of gross inflows.

The continued flow of retail money into equities via MFs proved crucial to the domestic stock market that witnessed aggressive selling by foreign investors last year.

Domestic institutional investors, encompassing MFs, insurance, banks, and other entities, invested a record sum of over Rs 2.7 trillion in Indian equities in CY22.

MFs alone pumped in a net Rs 1.8 trillion into equities, over 2.2x more than Calendar 2021, and also the highest ever, shows data from the Securities and Exchange Board of India.