The Mutual Fund retreat: When war panic meets your SIP - what investors should do now
Experts warn against panic selling, emphasizing the need to maintain investment discipline. (AI image) Category wise inflow and outflow details However, the moderation in flows
Experts warn against panic selling, emphasizing the need to maintain investment discipline. (AI image) Category wise inflow and outflow details However, the moderation in flows also marks the second consecutive month of declining SIP contributions. The industry had seen record-high SIP inflows of Rs 32,087 crore in March. So what is the biggest lesson that SIP investors need to take from the ongoing uncertainty? What should SIP investors do when geopolitical events trigger market swings? Mistakes investors make Are current market conditions creating an opportunity? What investors should know Will equity inflows recover soon? Challenges remain What needs to be understood is that the core strength of SIPs lies in rupee-cost averaging. When markets decline, the same monthly investment buys more units, lowering the average purchase cost. As markets eventually recover, these additional units can enhance long-term returns. From an investor standpoint the message from experts is clear: SIP investors should remain invested and continue their contributions without interruption, allowing them to benefit from the power of compounding and stay on track toward achieving their long-term financial goals. (Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.) The US-Iran war has not just hit portfolios of Indian investors, it has also led to record outflows, and fewer inflows in equities. One big sign of the impact of the ongoing uncertainty has been a jarring figure from May 2026 when the net equity inflows fell to a twelve month low of Rs 22,908 crore. This is a fall of 40% from the level of Rs 38,440 crore in April, also making it the steepest month-on-month decline since May 2023.Experts have linked the decline in inflows to heightened geopolitical tensions and increased market volatility.According to Association of Mutual Funds in India (AMFI) data, lumpsum investments were particularly affected as rising crude prices, weakness in the rupee and periodic market corrections clouded short-term visibility. Unlike Systematic Investment Plans (SIPs), one-time investments tend to be more sentiment-driven, with investors often preferring to wait for better entry points during volatile periods.Among equity-oriented categories, flexi-cap funds attracted the highest inflows at Rs 5,176 crore, although this was nearly 49% lower last month.Small-cap funds got Rs 4,946 crore, while mid-cap funds saw Rs 4,385 crore inflows, both seeing declines of 33% and 28%, respectively, compared with April.Gold exchange-traded funds (ETFs), meanwhile, recorded net outflows of Rs 725 crore in May, marking their first monthly outflow in 13 months.Debt mutual funds saw a sharp reversal, registering net outflows of Rs 96,949 crore during the month compared with inflows of Rs 2.47 lakh crore in April.“The real risk this month isn't equity at all.
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