sip: Investors believe in SIP despite market weakness in April

Investors continued to pump money through the Systematic Investment Plan (SIP) in April, despite the benchmark index falling by almost 9% from their peak at the end of the month. According to the Association of Mutual Funds in India (AMFI), assets under management of SIP-linked funds reached a record Rs 5.8 lakh crore in April. The share of SIP Linked AUM in the total mutual fund AUM was 15.2% compared to the long term average of 11%.

The expansion of SIP AUM was driven by the continued surge of SIP monthly flow. For the eight-month line, it has remained at over Rs 10,000 crore, which has brought the total growth in the last 12 months to Rs 1.3 lakh crore. This has partially offset the impact of heavy sales by foreign portfolio investors (FPIs), which have raised about Rs 1.49 lakh crore during the period.

In April, 11.3 lakh new SIP accounts were opened, bringing the total number to 5.4 crore. The SIP stoppage ratio, which is obtained by dividing the number of closed SIP accounts by the number of newly opened accounts, remains at 0.48, which is lower than the long-term average. The average ticket size per month of SIP account decreased by 21% to Rs. 2200 / – compared to the long term average level.