SIP inflows hit Rs 31,000 crore in December; stoppage ratio rises to 85%

The number of contributing SIP accounts increased to 9.79 crore in December, compared with 9.43 crore in November, reflecting steady growth in retail participation.

• SIP inflows hit a record Rs 31,002 crore in December, up from Rs 29,445 crore.
• SIP accounts rose to 9.79 crore, with 60.46 lakh new SIPs registered in December
• Adjusted SIP stoppage ratio was 55%, overall at 85%.

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Systematic Investment Plan (SIP) flows strengthened further in December, with monthly inflows rising to a record Rs 31,002 crore, up from Rs 29,445 crore in November, taking overall SIP assets under management (AUM) to Rs 16.63 lakh crore, or 20.7% of the mutual fund industry’s total assets. The number of contributing SIP accounts increased to 9.79 crore in December, compared with 9.43 crore in November, reflecting steady growth in retail participation.

During December, the industry registered 60.46 lakh new SIPs, higher than 57.13 lakh SIPs registered in November, while 51.57 lakh SIPs were discontinued or matured, compared with around 43 lakh SIPs in the previous month. This pushed the headline SIP stoppage ratio to about 85% in December, higher than the 75.56% stoppage ratio recorded in November. However, AMFI clarified of the total SIP closures in December, around 33 lakh SIPs were true discontinuations, while nearly 18.6 lakh SIPs matured. When only discontinued SIPs are considered, the adjusted stoppage ratio moderates to around 55%, offering a more accurate reflection of churn. AMFI has not provided a similar break-up of discontinued versus matured SIPs for November.

Also read: Equity mutual fund inflows slip 6% MoM to Rs 28,054 crore in December: AMFI data

The stoppage ratio shows how many SIPs stopped (or matured) compared to how many were newly registered in that month. If the ratio goes above 100 percent, it means more SIPs were stopped than started in that month.

On the equity side, mutual fund inflows moderated marginally to Rs 28,054 crore in December, down about 6% from Rs 29,911 crore in November, amid market volatility and global headwinds. Overall industry AUM stood at Rs 80.23 lakh crore in December, slightly lower than Rs 80.7 lakh crore in November.

On this months SIP number, Ovas Bakshi, Head-Retail Sales, Kotak Mahindra AMC noted, “We witnessed a growth of over 5% in December, as some inflows from November were deferred due to the holiday period. This growth, however, remains in line with our expectations." He added that investors continue to experience the benefits of SIPs in wealth creation. "Month after month, they return to build more investment-oriented portfolios. We are seeing a clear trend of financialization of savings in the country, and we believe this momentum will persist. More and more investors are expected to join mutual funds, keeping flows in positive territory and driving SIP numbers to new heights," he said.