93 lakh new SIP registrations in April-December 2020

New SIP registration has increased by 8% to 93.3 lakh in Apr-Dec 2020 as against 86 lakh in the corresponding period of 2019, shows AMFI data.

However, the number of discontinued or completed SIPs has gone up at a much faster pace. In Apr-Dec 2020, the number of completed or discontinued SIPs rose by 26% to 63.4 lakh from 50.5 lakh. Experts attributed this increase to outflows from equity funds amid a record rally in the markets.

An analysis shows that in December, the SIP numbers stand improved as against the preceding months. Data from AMFI shows that more than 14.2 lakh SIPs were registered in December, up 34% from November’s 10.6 lakh new SIPs. At the same time, the number of discontinued SIPs rose only by 7% to 7.76 lakh in December from 7.24 lakh in November.

The mutual fund industry faced steady outflows from equity funds in the second half of 2020 as many investors have booked profits following a sharp rise in the equities market and exited underperforming schemes. Some experts also feel that a record jump in demat accounts in 2020 also indicates that many investors have opted for direct stock investing instead of MFs.

Some industry voices like AMFI CEO N.S. Venkatesh, however, have a different view. The AMFI CEO feels the investors have not exited mutual funds altogether. Many investors have booked profit to exit their schemes but are entering afresh through SIPs in other schemes.

In December, pure equity funds witnessed an outflow of Rs 10,147 crore. In November, the outflows from pure equity funds stood at Rs 12,917 crore. The outflow number stood at Rs 2,724 crore in October, Rs 734 crore in September, Rs 4000 crore in August and Rs 2480 crore in July.

On the other hand, in the last couple of months NFOs of pure equity schemes have witnessed good inflows. In December, for instance, NFOs of equity funds mobilized Rs 7,586 crore.