SIP additions fell to 6-month low

December 12, 2024 10:13

The systematic investment plan (SIP) account additions declined for the fourth month in a row in November, after reaching a record high of 3.5 million in July 2024.At 1.03 million, the net additions last month were the lowest in six months. In October, the industry had added nearly 2.5 million accounts.

Data from the Association of Mutual Funds in India shows that the decline in net additions was largely due to a sharp fall in new registrations.

In November, investors opened million new accounts, down from 6.4 million in October.

"The new SIP registrations have declined, but there has been no increase in stoppages compared to previous months," said Aashish Somaiyaa, CEO, WhiteOak Capital Asset Management Company.

"There can be many reasons for this, the first being that November had only 18 working days compared to 21 days in October. Also, the festival season, wedding season, and end-of-year considerations may have resulted in a slowdown in the retail business. We have not come across any market- or performance-related reasons in any of our interactions with industry participants," he added.

Himanshu Srivastava, associate director -- manager research at Morningstar Investment, also attributed the decline to the festival and wedding seasons, while adding that higher volatility in the equity market may have prompted some investors to take a wait-and-watch approach.

"A cautious, wait-and-watch approach among investors was observed following a robust October amid market uncertainties. Furthermore, the onset of the festival and wedding seasons, along with the holiday period, may have led investors to delay their investment decisions," he said.

Another factor behind the lower SIP account additions, according to experts, is the slowdown in new fund offering (NFO) launches. Only 10 equity NFOs, including passive ones, were launched in November, compared to 24 in October.

The slowing SIP account growth has not impacted inflows, with the November collection remaining at a similar level to the previous month's contribution, at Rs 25,320 crore.

-- Abhishek Kumar/Business Standard

« Back to LIVE

TOP STORIES

Former PM Dr Manmohan Singh passes away at 92

Former Indian Prime Minister Manmohan Singh passed away on Thursday night at the age of 92. He was brought to the emergency department of AIIMS Delhi in critical condition after "sudden loss of consciousness."

Manmohan Singh dropped pre-medical course: Book

Former Indian Prime Minister Manmohan Singh, who died at the age of 92, dropped out of a pre-medical course after losing interest in the subject, according to a book by his daughter. Daman Singh's book "Strictly Personal: Manmohan and...

Steady progress in implementing LAC pact: China

He said that in recent times, based on the important consensus reached by the leaders of the two countries, China and India have maintained close communication on the border situation through diplomatic and military channels and achieved...

BJP got Rs 2,600cr donations in 2023-24, Cong Rs 281cr

During 2023-24, while the BJP received over Rs 723 crore worth of donations from Prudent Electoral Trust, it also got over Rs 127 crore from Triumph Electoral Trust and over Rs 17 lakh from Einzigartig Electoral Trust.

Konstas, Bumrah Share Honours On Day 1

The four wickets that India prised out in the third session, on balance, swung the game back in their favour, says Prem Panicker .