The nationwide lockdown has affected new SIP registration in the Rs.25 lakh crore MF industry. The latest quarterly AMFI data shows that new SIP registrations have declined by 7.24 lakh to 24.71 lakh in April-June compared to 31.95 lakh in January-March.
In addition, the industry has seen marginal increase in SIP discontinuation. Discontinuation of SIPs increased to 18.50 lakh in June quarter as against 17.71 lakh in March quarter.
Experts believe that decline in number of new SIP registration and marginal increase in discontinuation of SIPs is largely due to financial constraints and weak economic sentiments.
Ashutosh Bishnoi, MD & CEO Mahindra Manulife MF said, “The actual number of new SIPs in June is higher than the previous two months. In fact, at gross level, the industry added around 9 lakh new accounts. And the total number of accounts went up to 3.23 crores, higher than April or May. Overall, over 6 lakh net new SIPs were added in April-June 2020. So, while it might be called a slowdown, it is pretty normal for SIP investors to delay their commitment to long term plans in the face of short term adversity. We hope that these investors will come back again to the industry after a while.”
Jimmy Patel, MD & CEO, Quantum Mutual Fund believes that financial constraint due to job loss or salary cuts is the key reason for increase in SIP discontinuation and decline in new SIP registrations. “Further, volatile market conditions and slowdown in the economy are discouraging many investors to enter the market,” he added.
Swarup Mohanty, CEO, Mirae Asset observes that many investors could not digest heightened volatility which is currently happening in the market. Meanwhile, many investors have booked profit in June and discontinued their existing SIPs till things settle down, said Swarup.
|
Quarter |
No of new SIPs registered |
No of SIPs discontinued/tenure completed |
|
April-June |
24.71 |
18.5 |
|
January-March |
31.95 |
17.71 |
