SIP Accounts rose despite Mutual Fund Outflows

New SIP account registration has increased to 16.04 lakhs in January 2021 due to the increase of Equity market scaling. As of AMFI data, this is the second month in a row when SIP accounts registrations hit a record level. In January 2018, the SIP account registration was stood at 12.90 lakhs.

On the other hand, the two months following an average of new SIP registration reached 30.70 lakh accounts compared with an average of 18 lakh in the past four and a half years.

According to the reports, in January 2021, the new SIP account opening ratio has brought down the SIP stoppage ratio to 0.47. However, the ratio indicated that the number of SIP accounts closed and opened new accounts during the month. Further, in May 2020, the ratio has risen to 0.81.

As per the source, in January 2021, up to 8.70 lakh, SIP was added which remained highest in three years. At the end of January 2021, the SIP account count stood at 3.06 crores.

Mutual Fund Outflows:

Besides, the mutual funds have recorded net outflow for seven months in a row while the SIP accounts were increased. As of the reports, the total cumulative redemption has reached Rs. 42,257 crores during the same time.

As per the records, the decrease in a fixed deposit interest rate and increase of physical meetings with clients after the relaxation of lockdown norms in July are the major reasons for the increase in SIP accounts. Moreover, the pick-up in consumer confidence with stability in disposable income is also one of the factors behind the SIP account opening.

A source said that the SIP book published better results since December. As per the source, since April 2020, the book was contracted for the eight months. It has remained above Rs. 8,000 crores from the last two months. Further, the AUM of SIP schemes obtained Rs. 3.90 lakh crores at the end of 2021.