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So far in current fiscal, retail investors have stopped SIPs in over 1.79 crore accounts. (Photo Credit: iStock)

Retail investors stopped SIPs in more than 23 lakh mutual fund accounts in January 2024. Some of these accounts were discontinued while, in others, the tenures had got completed. This is first time that so many accounts have been closed in a single month in India’s history. On average, retail investors closed 16 lakh SIP accounts every month so far in the current fiscal.

This might be because of the negative returns the market has generated with the kick-start of the new year. Both benchmark indices, Nifty 50 and Sensex 30 have given negative returns in January 2024. FPIs were also net sellers in the month under consideration. Overseas investors had kick-started the new year with sale of equities worth Rs 24,734 crore. In fact, India witnessed highest FPIs selling in January vis-a-vis other emerging nations.

So far in current fiscal, retail investors have stopped SIPs in over 1.79 crore accounts. While, the total number of SIP accounts currently stand at 7.91 crore. While, total SIP AUM stand at over Rs 10.26 lakh crore in the industry.

The total number of mutual fund accounts stand at 16.95 crore. While, aggregate AUM of the industry is in excess of Rs 52 lakh crore.

SIP AUM constitutes only around 19 per cent of mutual fund industry’s total AUM. This shows how much room is there for retail money to come in the industry.

But its not that retail investors have become bearish on domestic equities. The account opening has been strong. Industry AUM has also increased over the years. Retail investors opened monthly average of 30 lakh new SIP accounts so far in FY24.

Infact, small investors opened record number of over 51 lakh new SIP accounts in the calendar year’s first month. They invested more than Rs 18,000 crore via SIP in the month under consideration (which is also a record).