SIP inflows hit record in Dec, but mutual funds see heavy overall outflows

Systematic investment plan (SIP) inflows climbed to a fresh all-time high in December, underlining the resilience of retail participation in equity markets, even as the mutual fund industry recorded sizeable net outflows during the month, data released by the Association of Mutual Funds in India (AMFI) showed on Friday.

Monthly SIP contributions rose to Rs 31,002 crore in December, up from Rs 29,445 crore in November, marking a 5 per cent increase on a month-on-month basis and a 17 per cent rise year-on-year. The sustained growth in SIP investments helped support equity participation despite bouts of market volatility.

Equity mutual fund inflows stood at Rs 28,054 crore during the month, while gold exchange-traded funds (ETFs) saw a sharp surge in interest, attracting inflows of Rs 11,647 crore compared with Rs 3,742 crore in November. The strong demand for gold ETFs pointed to a growing preference for diversification and defensive allocations.

However, the broader picture revealed a more cautious investor stance. The mutual fund industry recorded net outflows of Rs 66,571 crore in December, reflecting significant redemptions in certain categories as investors rebalanced portfolios. Hybrid schemes attracted inflows of Rs 10,756 crore, while ‘other schemes’, including ETFs, recorded net inflows of Rs 26,723 crore.

Within equity categories, flexi-cap funds witnessed a notable pickup in inflows, suggesting that investors are favouring strategies offering flexibility across market capitalisations amid uncertain market conditions.

Market observers said the data points to a shift in investor behaviour rather than a retreat from equities. Himanshu Srivastava, Principal Manager – Research at Morningstar Investment Research India, said equity participation remained structurally intact, but investors were becoming more selective, with greater emphasis on diversification, portfolio balance and risk management rather than broad-based risk-taking.

Despite intermittent volatility, flows remained resilient, supported by steady SIP contributions and continued confidence in India’s long-term growth prospects, Srivastava added.

The strong SIP numbers also reflect the widening retail investor base. Rising participation from Gen Z investors, women and households in smaller cities and towns has strengthened the SIP ecosystem, positioning it for sustained growth in 2026.

For the first time, cumulative SIP investments in a calendar year have crossed Rs 3 lakh crore. AMFI data showed SIP inflows touched Rs 3.04 trillion up to November, compared with Rs 2.69 trillion in 2024.

Industry analysts say SIPs have emerged as a key growth driver for the mutual fund sector, supported by digital adoption and the gradual shift of household savings towards financial assets. According to ICRA Analytics, these trends, combined with sustained net inflows and market expansion, could help India’s mutual fund industry assets under management surpass Rs 300 trillion by 2035.

With IANS inputs