According to sector officials, nearly 240,000 SIP accounts matured in April — bringing down the net account additions to 480,000. This is less than the average 626,000 monthly additions seen in FY17. And those opened in April were not of high ticket size, compared to those matured. This resulted in a fall of about Rs 66 crore in SIP flows.
G Pradeepkumar, CEO of Union Mutual Fund, says,“Generally, after a hectic year-end period, the beginning of the new financial year tends to be slow. This would also contribute to a fall in SIP quantum.”
Domestic retail investors have increasingly turned towards systematic investment plans. The quantum of inflow has gone up from less than Rs 1,000 crore a month to more than Rs 4,300 crore. This ensured wider penetration of mutual fund products and also provided enough liquidity to fund managers. In the previous financial year, this mode of investment contributed nearly Rs 44,000 crore, the highest ever.
Kaustubh Belapurkar, director (fund research) at Morningstar India, says, “The decline in SIP investments should not be inferred as a pause. Inflows are quite strong and I think it will continue. In terms of maturity, April may be an aberration of higher number of accounts reaching maturity but not renewed.”