Mutual fund inflows double in 2024 as retail SIPs hit record highs

Equity schemes rake in Rs 3.5 trillion, SIPs account for over half the inflows

The growth journey of mutual funds (MFs) got a leg up from retail investors in 2024, with systematic investment plan (SIP) inflows registering a sharp jump and investor count going up by nearly 10 million in the first 11 months of the year.

 

SIP inflows, which stood at Rs 17,610 crore in December 2023, rose steadily throughout the year to reach Rs 25,320 crore in November 2024, shows data from the Association of Mutual Funds in India (Amfi). The total SIP inflows stood at Rs 2.4 trillion for the January-November period.

 

SIP inflows largely come from retail investors.

 

 

The surge in investments through the SIP route was a major contributor to the record inflows into active equity schemes. As of November, investors had poured in record Rs 3.5 trillion into active equity schemes, more than double the Rs 1.6 trillion tally of 2023.

 

SIPs alone contributed nearly Rs 2 trillion to the total active equity fund inflows of Rs 3.5 trillion.

 

According to MF officials, the surge in SIP inflows shows growing retail interest in mutual funds. "The industry's ability to attract consistent SIP flows is a vote of confidence in its ability to deliver value to investors over the long term," Venkat Chalasani, chief executive of Amfi, said in a recent communication.

 

Amfi also cites the strong performance of equity schemes in recent years as a key driver. Equity MF schemes have delivered strong returns in recent years amid a bull run in the market. In 2024, while the benchmark indices have delivered around 8 per cent, the broader market indices Nifty Midcap 100 and Nifty Smallcap 100 are up around 24 per cent. Equities had delivered even better returns in 2023.

 

The strong showing on the returns chart also enabled MFs to attract new investors. Till November 2024, MFs had added 9.8 million investors, compared to 5.4 million additions during the same period in 2023. The total unique investor count stood at 51.8 million in November 2024.

 

Apart from the strong past performance, investor additions also got a boost from record number of fund launches in the equity space, both active and passive. MFs launched 153 equity schemes in 2024 compared to 89 launches last year.

 

Overall, the surge in MF inflows proved to be a major support for the market, especially in the later part of the year when foreign portfolio investors (FPIs) aggressively sold India stocks. MFs bought equities worth Rs 4.2 trillion in 2024 (as of December 20).

 

The MF inflows, according to experts, will remain a key variable for the market, especially if FPIs continue to sell.

 

"The ongoing rebound in FPI inflows may be short-lived, as falling global growth can alter their risk appetite. Flows from domestic institutional investors (DIIs) are as meaningful as FPI flows, with retail flows increasingly being directed in markets through insurance, EPFO, and MFs. Current monthly SIP book of MFs in India is Rs 25,300 crore, which should provide good support to the markets in case we witness continued FPI withdrawals," Canara Robeco MF said in its 2025 outlook.