Number of discontinued or completed SIPs have risen by 20% to 40.5 lakh in April-September this year, as against 33.8 lakh in the corresponding period last fiscal, shows AMFI data.
While the number of new SIP registrations has also witnessed an increase, it is considerably lower than the discontinued SIPs. The number of new SIP registrations increased by nearly 3% to 57.1 lakh in the first half of this fiscal compared to 55.5 lakh in April-September 2019.
Experts feel that subdued performance of some mutual fund schemes coupled with job losses, pay cuts and uncertainty over market conditions led to SIP discontinuation.
"Due to conditions like layoffs, pay cuts and uncertainty over market movement, investors have discontinued their SIPs,” said Debashish Mohanty, President and Head of Sales of UTI MF.
Between April and July, the number of salaried people losing their jobs amid the coronavirus pandemic surged to 1.90 crore, shows data from the Centre for Monitoring Indian Economy (CMIE).
Further, disappointment among many investors who have earned subdued returns after 3-5 years of SIP is another factor, said Jimmy Patel, MD & CEO, Quantum MF.
Moreover, many SIPs could not be renewed due to lockdown constraints. These investors had invested in SIPs through physical mode of transaction, said DP Singh, ED & CMO (Domestic), SBI MF.
