“I’m not saying that redemptions should not be taken into account. I’m just saying how you have to read the numbers. We take gross flows because it’s the sum total of small investments coming in. Redemptions are done in large amounts, based on what has been accumulated over long periods of time,” Chalasani told reporters during a call.
Every month, AMFI publishes monthly SIP investment data that includes gross figures. Critics often cite net inflows, which also take redemptions into account, to indicate that the mutual fund industry might be fudging SIP inflow figures.
“We thought it would be better to clarify how the numbers should be read. We just want to clarify that refunds should not be read with SIP numbers,” he said.
Giving the example of a monthly SIP of Rs 10,000, he said if an investor withdraws Rs 6 lakh after 5 years but continues with the SIP, the repayment should not be considered when looking at the bigger picture.
“Redemption is the sum total of what you have invested over a longer period of time. In accounting terms, if I put in Rs 100 every month and then withdraw Rs 10,000 that I have invested over a period of 10 years, there will be a net outflow. But in reality I keep investing Rs 100 even when I am making a withdrawal of Rs 10,000 to invest in some other scheme. So what do I need to look at to see whether the SIP numbers are growing or not? If it is growing, it is good,” Chalasani said. The SIP data for the month of July shows that inflows rose to Rs 23,332 crore against Rs 21,262 crore in June. The number of new SIPs registered in July was 72,61,928. SIP AUM was highest ever at Rs 13.09 lakh crore for July 2024 as compared to Rs 12.43 lakh crore for June 2024. The number of SIP accounts stood at an all-time high of 9.3 crore as compared to 8.99 crore in June.
Read also | SIP mutual fund inflows rise 10% to cross Rs 23,000 crore for the first time
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