Page 17 - Banking Finance March 2023

MUTUAL FUND

Mutual Fund

News

SIP inflows in January hit registered, which indicates increasing Tax experts suggest that the post-tax
investor belief in the instrument." returns need to be factored in although
new high of Rs 13,856 government officials believe that de-
The Amfi data showed that it was in
crore October last year when monthly SIP spite tax on the earnings, it still offers
among the best re-turns. For someone
Despite high volatility in the country's flows topped the Rs 13,000-crore mark
in the 30% tax bracket, the post-tax
stock market and global uncertainty, for the first time and has remained
return works out to around 5. 6%. The
retail investors continued to pour above that figure for the last four
decision to enhance the limit follows
money into equities through the mu- months. Since January of last year, to-
demands from some of the subscribers.
tual fund route during January. tal inflow through the SIP route was
almost Rs 79,450 crore. The government has budgeted for a
As a result, monthly inflows into mu-
significant part of the increase in the
tual fund schemes through the system-
atic investment plan (SIP) route scaled 50k-70k senior citizens small savings kitty to come from the
SCSS, officials indicated. During the
a new all-time peak of Rs 13,856 crore,
may opt for Rs. 30L de-
while small-cap funds attracted net next financial year, the government
inflows of nearly Rs 2,250 crore, the posit scheme expects the flows into small savings
schemes, which include public provi-
highest among all equity schemes, data The government expects as much as
dent fund and post office deposits, to
released by fund industry trade body 10% of the seven lakh senior citizens,
increase, after seeing adip during the
Amfi showed. who are using the full benefit of the
current financial year. The net accre-
Senior Citizens Savings Scheme (SCSS),
According to Amfi chief executive N S
tion is budgeted to increase 7. 4% to
to take advantage of the decision to
Venkatesh, the latest industry data
over Rs 4. 7 lakh crore.
double the investment limit to Rs 30
shows a positive trend in equity MF
lakh from next financial year. The other source of accretion is ex-
flows. Small-cap funds have witnessed
pected to come from the Monthly In-
inflows, majorly driven by retail inves- Of the 50 lakh subscribers of the
come Scheme, where the investment
tors as their investment is for the long scheme, which currently offers 8% an-
limit has been doubled to Rs 9 lakh for
term. "Encouraging SIP numbers indi- nually, around 15% currently use the
single account and to Rs 15 lakh from
cate retail investors' trust in mutual entire limit, data available with the fi-
Rs 9 lakh for joint accounts. The
funds. We believe that SIP inflow mo- nance ministry showed. While contri-
scheme currently offers 7. 1% to sub-
mentum has and will continue to bal- bution up to Rs 1. 5 lakh is eligible for
scribers.
ance out the FII outflows in the mar- benefits under section 80C of the In-
ket," Venkatesh said. "(January) come Tax Act, interest under the The third element where gains are
showed almost 23 lakh new SIPs being scheme is taxable. expected is through the new instru-
BANKING FINANCE | MARCH | 2023 | 15