SIP closure rises 7.4% month-on-month to 14.19 lakh in May

The number of Systematic Investment Plan (SIP) accounts being discontinued saw a 7.4% month-on-month rise to 14.19 lakh in May despite the stellar inflow into mutual funds.

The number of Systematic Investment Plan (SIP) accounts being discontinued saw a 7.4% month-on-month rise to 14.19 lakh in May despite the stellar inflow into mutual funds. The new SIP registration also rose to 24.7 lakh last month from 19.56 lakh in April, indicating new registrations of over 5 lakhs, as shown in Association of Mutual Funds in India (AMFI) data.

According to DP Singh, Deputy Managing Director and CBO of SBI Mutual Fund, the higher number of SIP registration than discontinuation shows investors’ continued confidence in the route. He further added that this could also be due to an easy cancellation facility available through online modes.

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Investors continued leaving their money in mutual funds, with contributions in SIPs witnessing a new rise of Rs 14,749 crore last month, after a brief dip to Rs 13,728 crore in April. It was Rs 14,276 crore in March. This strong inflow led assets under management of SIP to rise by 5% to Rs 7.53 lakh crore last month from Rs 7.17 lakh crore in April.

The sudden increase in SIP inflows amid higher cancellations shows that new investors continue to invest more money than the average ticket size. According to data, the number of SIP accounts discontinued or matured rose from 13.21 lakh in April to 14.19 lakh in May.

Overall, 1.43 crore SIPs were discontinued or matured in 2022-23, which was higher than 1.11 crore SIPs in 2021-22. Assets under management of equity mutual funds rose to 4.5 % month-on-month to Rs 16.56 lakh crore in May, fueled by a surge in market indices and a spike in equity scheme sales.