 "SIP account additions slip to 6-month low in November, shows Amfi data")
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 1.3 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 5 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, chief executive officer of 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.
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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.
“SIP contributions remain a standout story, holding steady at Rs 25,300 crore in November. This marks an 87 per cent rise since December 2022 and a 44 per cent increase since December 2023, signalling continued and growing investor confidence. SIPs have increasingly become a habit-forming investment strategy, providing a reliable method for investors to deploy money in equity markets. This trend is expected to continue and strengthen in the coming years, underlining the long-term growth potential of systematic investments,” Nuvama Alternative & Quantitative Research noted in a report.
However, overall active equity fund inflows — weighed down by a slump in lump-sum contributions —witnessed a 14 per cent month-on-month (M-o-M) decline in November, at Rs 35,943 crore. The M-o-M decline in equity fund inflows was largely a result of a sharp fall in investments in sectoral and thematic funds. The tally dropped from Rs 12,279 crore in October to Rs 7,658 crore in November.