SIP Inflows Slow Down For First Time Since June 2023
Advisors are not worried at all as they break down the reasons and factors that has caused the marginal slip in inflow.
SIP has gained popularity as more people sign up to invest via this simple yet effective route. With many advantages to offer, the inflows via SIP contributions had been on a steady climb since July 2023.
This growth in the inflow has paused during the month of November, according to data released by AMFI on Tuesday. The SIP contribution for the month of November stood at Rs 25,320 crore, after it moderated by Rs 2 crore from last month's inflow of Rs 25,322.
After a decrease of Rs 14.23 crore was recorded in June 2023, the growth had been steady for the next 16 months. The numbers had even seen a spurt in July 2024 with an increase of Rs 2,060 crore from the previous amount. SIP inflows had recorded new highs every month during this period, with the lowest margin of growth being Rs 85 crore in March 2024.
Now, what are the reasons for the pause in these numbers and will they continue? Advisors are not worried at all as they break down the reasons and factors that has caused the marginal slip in inflow.
Advisors' Take
Yes, the markets have been choppy for the last two months as Foreign Institutional Inflows had slipped. But the financial planners' takes on the pause is focused on a few other factors as well.
"I think it has nothing to do with anything but the market sentiment. Market corrections and volatility would have called for people to pause their SIPs for a month or so before continuing. People may not have enrolled for new SIPs and the ones that are existing would have simply continued," said Mohit Gang, co-founder of Moneyfront.
While the pauses may have caused the climbing numbers to pause, the differences that the various types of SIP's available also explains the change.
"Rs 2 crore is as good as rounding error when we talk about SIP contributions. You also have concepts like daily SIPs so here, the number of days in a month will affect the total. The lower number of days in November calls for a 3% difference which is nowhere close to the Rs 2 crore difference," said Amol Joshi, founder of PlanRupee Investment Services.
The SIP numbers may not have increased when compared to last month, but they have nearly stayed constant according to Joshi.
