AMFI REFUSES TO DISCLOSE NET SIP FLOWS
If you are thrilled about the way the SIP flows have been building up each month, especially in FY24, there is another slightly darker side to it. Remember, that the SEBI only discloses the gross SIP number. So, the fabulous SIP flows of ₹23,332 Crore that we got to see in July 2024 was actually the gross SIP figure. The net SIP flows in the month of July 2024 (net of redemptions, stoppages, cancellations and rolling off SIPs is a much smaller figure. What is more interesting is the AMFI chairman, V N Chalasani, refused to disclose the net SIP figure as a matter of public disclosure. Chalasani has his own reasons for sticking to gross SIPs.
According to Chalasani, it is the gross SIP figure that reflects the flows into mutual funds via the SIP route. The net figure, according to the AMFI chair, may be distorted for a variety of reasons. Firstly, a lot of the SIP stoppages could just be investors shifting from SIPs to lumpsum investing. By calling it SIP redemptions, the picture may be misleading as, in reality, the investment may still be there in mutual funds. Also, Chalasani has underscored that many of the SIP cancellations are due to lethargy to renew or other technical reasons which lead to cancellations of the SIP. Hence, disclosing the net SIP figure may be too misleading, since the SIP AUM is eventually part of the overall mutual fund AUM. However, one cannot refute the fact that the trend of net SIP flows versus gross SIP flows can give some interesting insights into the mutual fund flows.
NET VERSUS GROSS SIP FLOWS – FY23
First and foremost, let us look at the data of gross SIP flows and net SIP flows for the year FY23, extending from April 2022 to March 2023. We have shown the gross SIP flows (as reported by AMFI), net SIP flows as reported by mutual fund registrars and the net to gross SIP ratio, shows the stickiness of the SIPs or the lack of it.
Reporting |
Gross SIP Flows |
Net SIP Flows |
Net to Gross |
Apr-22 |
11,863 |
6,706 |
56.53% |
May-22 |
12,286 |
8,155 |
66.38% |
Jun-22 |
12,276 |
8,600 |
70.06% |
Jul-22 |
12,140 |
7,812 |
64.35% |
Aug-22 |
12,693 |
6,130 |
48.29% |
Sep-22 |
12,976 |
6,399 |
49.31% |
Oct-22 |
13,041 |
7,499 |
57.50% |
Nov-22 |
13,306 |
3,257 |
24.48% |
Dec-22 |
13,573 |
5,869 |
43.24% |
Jan-23 |
13,856 |
7,649 |
55.20% |
Feb-23 |
13,686 |
8,004 |
58.48% |
Mar-23 |
14,276 |
7,795 |
54.60% |
FY23 Total |
1,55,972 |
83,875 |
53.78% |
Data Source: AMFI & Cafemutual
Here are some of the key takeaways from the gross to net SIP flow tabulation for the fiscal year FY23.
Let us now turn to how the situation changed in the fiscal year FY24.
NET VERSUS GROSS SIP FLOWS – FY24
Let us now turn to the data of gross SIP flows and net SIP flows for the year FY24, extending from April 2023 to March 2024. We have shown the gross SIP flows (as reported by AMFI), net SIP flows as reported by mutual fund registrars and the net to gross SIP ratio, shows the stickiness of the SIPs or the lack of it.
Reporting |
Gross SIP Flows |
Net SIP Flows |
Net to Gross |
Apr-23 |
13,728 |
6,977 |
50.82% |
May-23 |
14,749 |
5,696 |
38.62% |
Jun-23 |
14,734 |
5,608 |
38.06% |
Jul-23 |
15,245 |
5,494 |
36.04% |
Aug-23 |
15,814 |
7,071 |
44.71% |
Sep-23 |
16,042 |
7,364 |
45.90% |
Oct-23 |
16,928 |
8,686 |
51.31% |
Nov-23 |
17,073 |
9,058 |
53.05% |
Dec-23 |
17,610 |
6,470 |
36.74% |
Jan-24 |
18,838 |
8,192 |
43.49% |
Feb-24 |
19,186 |
8,248 |
42.99% |
Mar-24 |
19,271 |
9,109 |
47.27% |
FY24 Total |
1,99,218 |
87,973 |
44.16% |
Data Source: AMFI & Cafemutual
Here are some of the key takeaways from the gross to net SIP flow tabulation for the fiscal year FY24.
Let us now turn to how the situation changed in the fiscal year FY25.
NET VERSUS GROSS SIP FLOWS – FY25
Let us now turn to the data of gross SIP flows and net SIP flows for the year FY25, extending from April 2024 to July 2024. We have shown the gross SIP flows (as reported by AMFI), net SIP flows as reported by mutual fund registrars and the net to gross SIP ratio, showing the stickiness of the SIPs or the lack of it. We have only 4 months data, so trends will be extrapolated for greater clarity.
Reporting |
Gross SIP Flows |
Net SIP Flows |
Net to Gross |
Apr-24 |
20,371 |
8,660 |
42.51% |
May-24 |
20,904 |
9,226 |
44.14% |
Jun-24 |
21,282 |
8,581 |
40.32% |
Jul-24 |
23,332 |
8,964 |
38.42% |
FY25 Total |
85,889 |
35,431 |
41.25% |
Data Source: AMFI & Cafemutual
Here are some of the key takeaways from the gross to net SIP flow tabulation for the fi8st 4 months of fiscal year FY25.
FY25 has only 4 months of data, but that is good enough to extrapolate trends. One of the key trends we can decipher is that the net SIP to gross SIP ratio has been consistently falling from 53.78% in FY23 to 44.16% in FY24 to 41.25% in FY25.
WHY NET SIP RATIO IS FALLING – KEY REASONS
There are several reasons why the net SIP flows have been lagging the gross SIP flows. Here are some reasons and the ideal action plan.
Let us finally look at if there are any resolutions to this SIP stoppage challenge?
HOW TO IMPROVE THE NET TO GROSS SIP FLOW RATIO?
A lot of the steps to improve the net to gross SIP ratio has to come from the investors. The SIP investors must take care of basic things like ensuring that their KYC is regularly updated so they can avoid negative surprises. Secondly, investors must make it a point to check their bank accounts ahead of the SIP date. This will avoid unnecessary cancellation of SIPs, which are terminated if there are 3 bounces in a row. On thing the individuals can do is to opt for the perpetual SIP, which is a good choice if you don’t want to remember these dates.
There is a lot that financial advisors can also bring to the table to improve the net to gross SIP ratio. Investors need to be educated about the role of SIP in attaining goals, especially medium term, and long term goals. SIPs being terminated on goal milestones is understandable. However, SIPs being discontinued to book profits is not a good idea as that is not the purpose of the SIP, anyways. This lesson on the need to persist was best explained during the pandemic. Those who panicked and discontinued their SIPs may have got some temporary cash, but it was the investors who persisted with the SIP through the pandemic volatility were the ones laughing all the way to the bank!
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