SIP inflows remain robust in September as gold and multi-asset funds shine: Anand Vardarajan

SIP inflows have remained very encouraging despite Nifty’s subdued returns over the past year, reflecting the growing maturity and discipline of retail investors, says Anand Vardarajan of Tata Asset Management. September saw strong SIP momentum even as equity inflows moderated slightly from Rs 33,000 crore in August to around Rs 30,000 crore – a reasonable figure given the busy IPO calendar that month.

“Retail investors have shown a lot of maturity to stay invested and stay the course. So in that way, SIP numbers are very encouraging,” he said in an interview with ET Now.

He noted that gold ETFs stood out the most, with inflows almost quadrupling to around Rs 8,300 crore versus Rs 2,000 crore in August, underlining investors’ renewed interest in this asset class.

Vardarajan added that multi-asset funds, which diversify across equities, debt and precious metals, have also attracted around Rs 5,000 crore in new investments. He said this shift towards diversified and tangible assets shows that investors are seeking a balance between growth and safety amid persistent market uncertainties.

He said inflows into small cap funds, while still strong, are showing signs of moderating. September saw inflows of around Rs 4,300 crore, against Rs 5,000 crore earlier, indicating a slight taper. Year-to-date, small cap inflows stand at Rs 27,000 crore, compared to Rs 37,500 crore for flexicap funds. He noted that investors are becoming more cautious and are gradually shifting their allocations from pure small cap exposure to flexicap schemes, which offer a balanced mix of large, mid and small cap stocks.

“So what was a numero uno category last year in terms of inflows is no longer that and flexicap, which is really a combination of mid, large and small, investors have decisively started moving more allocations there,” he said. Vardarajan noted that midcap funds saw around Rs 5,000 crore inflows in September, surpassing smallcaps and coming second after flexicaps. However, he warned that midcap valuations appear stretched as they are more expensive than both small and large caps. Despite this, retail interest remains stable, with flows for mid-caps and small-caps virtually unchanged since the start of the year. He said it remains to be seen whether this midcap momentum will last given relative valuations and changing investor preference for diversified categories such as flexicaps.(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own. These do not represent the views of the Economic Times)