Recent AMFI data shows that MF industry has witnessed discontinuation of 5.40 lakh SIP accounts in April 2020 compared to 6.02 lakh in March, 5.74 in February, 5.95 lakh in January and 5.91 lakh in December.
Experts attribute this to recent recovery in markets, handholding by advisors and distributors and increasing awareness about mutual funds.
Swarup Mohanty, CEO, Mirae Asset attributes this to growing maturity of investors. “This is because many people have realised that the recent volatility in the market is due to the shock of the covid 19 pandemic. In addition, many distributors have been handholding their clients during these tough times and advising them to stay put and continue their SIPs.”
Meanwhile Sundeep Sikka, MD and CEO of Nippon Life India Mutual Fund said that many investors have decided to continue their SIPs once the equity markets gained some ground in April.
Seconding his views, George Heber Joseph, CEO and CIO, ITI Mutual Fund said that investor behaviour is reflection of recovery in the market. However, many investors may panic if market sees a sharp correction again, he added.
A. Balasubramanian, MD and CEO, Aditya Birla Sun Life Mutual Fund believes that the decline in discontinuation is due to SIP pause facility. He said, “Many investors who have paused their SIPs in March due to financial constraint have restarted their SIPs in April.”
|
Month |
No of SIPs discontinued (lakh) |
|
Apr 19-Apr 20 |
68.22 |
|
April 20 |
5.4 |
|
March 20 |
6.02 |
|
February 20 |
5.74 |
|
January 20 |
5.95 |
|
December 19 |
5.91 |
|
November 19 |
5.55 |
|
October 19 |
5.3 |
|
September 19 |
5.63 |
|
August 19 |
5.83 |
|
July 19 |
5.63 |
|
June 19 |
5.4 |
|
May 19 |
5.86 |
|
April 19 |
5.4 |
