InvestorQ : Will the SIP flows into Indian mutual funds continue in the coming months also?
Dilmini Mercia made post

Will the SIP flows into Indian mutual funds continue in the coming months also?

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Dawn Cherian answered.
2 months ago
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That is hard to say, but there are two important tests that you can run to check if these flows will sustain. Look at SIP folios and SIP AUM. SIP folios have touched 4.49 crore folios and looks poised to scale 5 crore by end of FY22. Of course traction would mean that SIP folios cross 10 crore folios. Second is the SIP AUM, which at Rs.5.45 trillion is already 43% of total equity AUM. This must move towards Rs.10 trillion to be truly meaningful in future.

The biggest challenge, in my view, is to avoid investor boredom in SIP and in equity mutual funds as an asset class. Just to cite an example. between 2009 and 2014, equity funds saw net outflows in every quarter. There was ennui that set in after the financial crisis of 2008. MF AUM started expanding only after 2014. The challenge is to prevent investor boredom and for that the returns on equity funds must continue to be robust at higher levels.

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