SIP investors beware, more than 16.33 lakh accounts were closed in January.
The erosion in the stock markets over the past few months has shaken investor confidence. Although investment flows into equity funds in mutual funds remained broadly stable in January, with a decline of 3.6 per cent, investors have become cautious in investing through systematic investment plans (SIPs). The number of SIP account closures in January has exceeded the number of newly registered accounts.
In January, more than 61 lakh accounts were closed against 56 lakh new SIP accounts opened. This is the sixth consecutive month of decline in SIP accounts on a net basis. The number of closed accounts, which was 44.90 lakh in December, has increased to 61.33 lakh in January.
While new SIP registrations were 54.27 lakh accounts in December, they have increased to 56.19 lakh in January. While investment inflows through SIPs, which were recorded at Rs 26,459 crore in December, were recorded at Rs 26,400 crore in January, according to data from the Association of Mutual Funds in India (AMFI).
Market experts believe that investors cancelling SIPs is the first sign of crisis and concern. Don’t be surprised if this trend of SIP cancellation gains momentum.
The job of asset management companies is not only to manage funds and outperform benchmarks, but also to handhold investors and intermediaries, to constantly communicate with investors and to advance the concept of longevity.
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