The year 2025 does not look good for the mutual funds. Every year millions of people used to invest money in mutual funds through SIP (SIP i.e. Systematic Investment Plan), but this time the news is shocking. This year, about 1.12 crore SIPs have been closed so far! Hearing this, everyone is wondering whether people are now taking confidence from mutual funds? Or is there anything else behind it? Let’s understand it in detail.
Market turmoil intimidated
This year, some such trend has been seen in mutual funds, which is a little disturbing. Out of the first six months of 2025, four months were such when the old SIPs were closed more than the new SIP started. 5 lakh more SIPs were closed in January, 10 lakh in February, 11 lakh in March and 116 lakh SIPs in April! That is, people are scared about the market this time.
Experts say that early this year some uncertainty increased worldwide. Shruti Jain, senior officer of Arihant Capital Markets, said that this year Trump changed some tax rules, which spread fear among investors. Especially in April, many people closed their SIPs. But the good news is that now the market is slowly recovering and people are starting to show trust again.
SIP stops ratio: What is this?
SIP stops ratio means how many old SIPs have been closed compared to the new SIPs started. If these ratio is more than 100%, then understand that older SIPs are being closed. 78% SIP closed in June this year, which was 72% in May and 59% in June last year. The SIP closing in April was three times more than the new SIP!
But this ratio is not so scared. Experts say that it also includes those SIPs, which end up after completing their time limit. Also, many people turn off their old SIP and invest in new SIPs, so that their portfolio is better. That is, every closed SIP does not mean that people are leaving mutual funds.
Why are people afraid?
SIP is such an easy way that you can make big funds by investing a little money every month. It prevents market fluctuations. But this year some people were scared due to market volatility and low profits last year. According to AMFI data, the number of SIPs closed in January, February and March was more than the new SIP. That is, people are looking at the market right now and are taking precautions.
What do figures say?
According to AMFI, this year remained only two months when the number of new SIPs increased. In the remaining four months, the process of shutting down SIP was more. A report in Nomura says that due to uncertainty in the market and high prices of shares, people have back a little back. But this does not mean that his trust with mutual funds has completely ended.
Tips for investors
Shruti Jain says that by looking at the SIP stop ratio or the trend of new SIP, your long time plans should not be changed. The market keeps on going up and down. The advantage of SIP is that it also gives you the opportunity to invest in the decline of the market. If you keep investing money for a long time, then the fluctuations of the market do not affect much and you can earn good profits.
Experts believe that as there is stability in the market, people will start investing in SIP again. If you are thinking of starting SIP or investing again, then this can be a good chance. Given the current condition of the market, experts say that keep your financial goals in mind and do not panic with a small decline.
Disclaimer: This article is only for information and should not be considered as an investment advice in any way. TV9 India suggests its readers and spectators to consult their financial advisors before taking any decision related to money.