SIP closure ratio at 18-month high, Dec applications slip to 750,000

The SIP closure ratio (applications for stopping SIPs as a percentage of fresh SIPs) in December was at 52%, implying a request for closure for every fresh application

The mutual fund (MF) industry’s systematic investment plan (SIP), a monthly investment scheme, seems to be losing favour among retail investors. The applications for fresh SIPs in December slipped to 750,000, down by a third as compared to August. 

The trend could spell trouble for the Rs 24-trillion MF industry, whose reliance on SIP flows has risen in the past four years. The industry is seeing a sharp fall in fresh SIP applications as well as requests for closures are growing. 

Until August, fresh applications for SIPs grew at a steady pace. The tally for the month was one of