SIP Flows in May 2026 taper to ₹30,954 Crore on macro uncertainty

SIP Flows in May 2026 taper to ₹30,954 Crore on macro uncertainty

MONTHLY SIP FLOWS REACT TO MARKET UNCERTAINTY

For the last 2 months, the SIP flows have been trending lower. The monthly gross SIP flows are still formidable at ₹30,954 crore; but recent underperformance of SIPs, outperformance by gold and global equities, as well as boredom at higher levels led to SIP flows tapering. The only positive tiding was that the SIP stoppage ratio fell to below 100%, but still remains too high to be sustainable. Today, SIPs are not just competing with direct equities, but with other asset classes like gold ETFs, silver ETFs, Multi-Asset Allocation Funds, and global ETFs. All these categories have managed to outperform domestic equities. Here is a quick 13-month view.

Data Source: AMFI

The SIP AUM at ₹17.12 Trillion saw a bounce of +1.60% over April and an overall gain of 13.32% from the lows of March. A similar trend was also visible in the overall AUM of Indian mutual funds; with the overall AUM getting back to new highs.

FOLIO ACCRETION STORY OF MAY 2026

SIP data over two months can be seen either in terms of change in the SIP folios or in terms of SIP AUM. Let us look at both perspectives. With the SIP Stoppage Ratio falling below 100% in May, the total SIP folios expanded from 1,044.26 Lakh folios in April 2026 to 1,046.72 Lakh folios in May 2026. That is MOM folio expansion of +0.24%. Let us also talk about how SIP AUM moved. Between April 2026 and May 2026, SIP AUM bounced from ₹16,85,126 Crore to ₹17,12,126 Crore. The higher SIP AUM can be attributed to the sharp bounce in the broad-based market indices. The end of the war in Iran may change the perspective of SIPs in India.

SIP STOPPAGE – FALLS JUST BELOW 100%

One of the critical ratios in understanding stickiness of SIP clients is the SIP Stoppage Ratio (Ratio of Discontinued SIPs to New SIPs). Here is a quick snapshot.

Data Source: AMFI

Between FY25 and FY26, the SIP stoppage ratio has gone up sharply from 75.63% to 94.51%. This picture is not entirely realistic, since the surge in SIP stoppage ratio in calendar 2025 was due to the SIP clean-up taken up by SEBI. In the two months of FY27, the SIP stoppage ration has averaged 98.21%, which is much higher even than the pandemic peaks.

What does a high SIP stoppage ratio indicate? It means; more SIPs are stopped than started during the month; and that is not good news. There is clearly a gap in the way investors appear to be treating their SIPs. In the past, the average SIP stoppage ratio used to be around 40% to 42% in normal times. Now even in normal times; it is substantially higher.

PRODUCTIVE SIP RATIO TAPERS MARGINALLY IN MAY 2026

The Contributing SIP ratio is the ratio of SIP folios that contribute flows to the overall SIP folios. That ratio touched its lowest level in the last one year in the month of February 2026. After a bounce seen in March, the ratio has again tapered in April and May 2026.

Data Source: AMFI

The Productive SIP ratio depicts the ratio of SIP folios that are actually giving business on a consistent basis out of the total outstanding SIP folios. These are the truly meaningful SIP folios. This ratio had fallen from over 96% to over 90% and has bounced back. However, on a longer-term comparison, it has moved up from an average of around 75% to well above 90%.

The moral of the story from the SIP data for May 2026 is that the SIP flows continue to be robust at a gross level. However, that is not the full picture! There is a worrying trend of SIP folios being closed at a rapid rate and even in normal times, more SIPs are being closed. Clearly, SIPs on equities are struggling to compete with alternate asset classes like gold, silver, MAAFs, and global equities.