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Time of India
4 days ago
- Business
- Time of India
Nearly 112 lakh SIPs closed in 2025: Should you worry about the negative net SIP trend?
Live Events What is the SIP stoppage ratio? The calendar year 2025 has seen a surprising development in the mutual fund space with around 112 lakh net SIPs (Systematic Investment Plans) closed so far, which raises a question whether the investors should worry about the negative net SIP trend to which a market expert says that the decline in net new SIP registrations this year largely reflects cautious investor sentiment amid global volatility.'The decline in net new SIP registrations this year largely reflects cautious investor sentiment amid global volatility. Events like the tariff changes announced by Trump earlier this year triggered some nervousness, leading to the liquidation of SIPs, particularly around April. However, this should not be a major concern, as we are already seeing signs of retail investors returning with renewed confidence as markets stabilise,' Shruti Jain, Chief Strategy Officer, Arihant Capital Markets shared with the first six months of the current calendar year, only two months have witnessed net new SIPs registered whereas four months saw more of SIP closure . According to a report by Nomura, the net new SIPs registered in January were negative 5 lakh which indicates more of SIPs February, March and April, around 10 lakh, 11 lakh, and nearly 116 lakh SIPs were closed, the report Investment Plan is always considered a disciplined and steady route for building wealth over time. With regular monthly contributions, SIPs help investors navigate market ups and downs through rupee cost averaging. However, the slowdown in SIP additions points to investors reacting to high valuations and bouts of volatility, Jain more SIPs closed in the current calendar year so far, Jain firmly said that some may have exited due to subpar returns over the past year. 'However, for long-term investors, this is precisely why SIPs are recommended—to navigate volatility through disciplined investing. It is advisable not to stop SIPs based on short-term market movements,' she mutual fund SIP stoppage ratio was recorded at 77.77% in June from 72.12% in May and 58.68% in June 2024 indicating that though more mutual fund SIPs were registered but the SIPs either stopped or their existing tenures ended have also increased, according to the data by Association of Mutual Funds in India (AMFI).In April, the stoppage ratio was 297% as the number of SIPs stopped or discontinued were 136.99 lakh whereas the number of new SIPs registered in the same period stood at 46.01 January, February, and March, the SIP stoppage ratio was recorded at 109%, 122%, 128% SIP stoppage ratio is the number of discontinued SIPs compared to the number of new registered SIPs. If this ratio crosses 100% then it indicates that more mutual fund SIPs are being stopped than the ones one must keep in mind that stoppage ratio also includes those SIPs that have expired. Besides, investors may have simply switched from one SIP to another as part of their portfolio the SIP stoppage ratio was over 100% for four consecutive months, is it important for investors to monitor SIP stoppage ratio or registration trend when making long-term investment decisions to which Jain says that while SIP trends provide insight into overall retail participation and sentiment, they shouldn't drive long-term investment phases come and go, but consistent investing through SIPs ensures disciplined wealth creation over time therefore it's best to view such trends as temporary reactions to market events rather than signals to alter a long-term plan, Jain recommends.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Economic Times
12-06-2025
- Business
- Economic Times
Lumpsum vs SIP: Is caution killing the case for lumpsum?
Mutual fund SIP inflows hit record highs in May amid market rally. Investors are cautious about lumpsum investments due to geopolitical tensions and slowdown fears. Vishal Dhawan suggests hybrid equity funds for lumpsum investments. Equity mutual fund inflows dropped, while hybrid funds saw increased interest. Overall mutual fund inflows decreased, but total assets under management grew. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads With mutual fund SIP inflows reaching record highs in May amid a market rally, a key question arises: Why are investors moving away from lumpsum investments? An expert explains that geopolitical tensions, trade concerns, and fears of a global slowdown—along with muted earnings and valuation worries—have made investors more cautious about lumpsum investing.'A combination of geopolitical uncertainty, trade wars, and fears of a global slowdown have made investors less confident about investing in lumpsums and more inclined towards SIPs in the current environment. Additionally, the slowdown in corporate earnings and concerns over the valuations of mid- and small-cap stocks are pushing investors to prefer SIPs as their investment strategy,' said Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a Mumbai-based wealth management firm, in a conversation with May, mutual fund SIP inflows rose marginally by 0.21% to Rs 26,688 crore, compared to Rs 26,632 crore in April. On a yearly basis, SIP inflows have surged nearly 28% from Rs 20,904 crore in May the current financial year so far, total SIP contributions by investors stand at approximately Rs 53,320 crore. For the calendar year to date, total SIP contributions have reached nearly Rs 1.31 lakh crore, up from Rs 98,571 crore during the same period last benchmark indices—Nifty50 and BSE Sensex—are down about 4% from their 52-week highs. With markets hovering near record levels, is the fear of buying at the peak discouraging lumpsum investments?Addressing the trend, Dhawan noted that investors often anchor to index highs, and their past experience of corrections from those levels tends to impact their willingness to invest in to the latest monthly data from the Association of Mutual Funds in India ( AMFI ), equity mutual funds witnessed a 22% drop in monthly inflows, receiving Rs 19,013 crore in May compared to Rs 24,269 crore in mutual funds saw an outflow of Rs 15,908 crore in May, a sharp reversal from the inflow of Rs 2.19 lakh crore in April. Meanwhile, hybrid mutual funds attracted higher inflows than equity mutual funds in May, with inflows rising 46% to Rs 20,765 crore from Rs 14,247 crore in funds saw a steep 73% decline in monthly inflows, receiving Rs 5,525 crore in May compared to Rs 20,229 crore in April. Different mutual fund categories showed mixed trends, with some attracting investor interest while others witnessed a advises that investors can still consider lumpsum investments in the current environment through hybrid equity funds, multi-asset funds, balanced advantage funds, and equity savings mutual fund inflows dropped by 89% in May. However, total assets under management (AUM) grew 3%, rising to Rs 71.93 lakh crore in May from Rs 69.73 lakh crore in April.
