SIP Inflows Still Strong Despite Exits

Here’s the twist. While so many SIPs are being discontinued, the monthly SIP inflow — the actual money coming in — is not falling. In fact, it’s slightly increasing. In April 2025, mutual funds received ₹26,632 crore via SIPs, compared to ₹25,926 crore in March and ₹25,999 crore in February.

This means that while many SIPs are getting closed, new ones are also being started. The inflow continues to grow month after month, which shows that interest in mutual funds isn’t dropping. Still, the rising number of discontinuations has triggered discussions.

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Are Investors Losing Trust?

At first glance, it may seem like investors are losing faith in the markets. But experts say otherwise. They believe this trend doesn’t mean investors are running away out of fear or disappointment. Instead, it could be a sign of maturity. Many people who started SIPs back in 2020, during or just after the COVID pandemic, may have completed their investment journeys.

For example, if you started a 3-year or 5-year SIP in 2020, it would naturally end in 2023 or 2025. So, many of these discontinuations could just be planned exits.

Return Expectations Vs Reality

One of the major reasons people are disappointed with their SIPs is due to unrealistic return expectations. Siddharth Alok, AVP at EpsilonMoney, says that a lot of new investors entered the market after 2020, when everything was booming. Since the markets went on a strong bull run in the past five years, many investors expected the same kind of growth to continue forever. Between 2020 and 2025, Nifty 500 has grown at around 25.7% CAGR. That’s an amazing number, but it’s not normal.

If we look at the past ten years, the Nifty 500 has grown at 13.9% CAGR — still very good, but not as explosive. So, when people don’t get 20–25% returns, they feel disappointed, even though 12–14% is actually quite healthy. The key, as per Alok, is to stay invested and understand that markets move in cycles. Ups and downs are natural.

Not Market Panic, But Portfolio Rebalancing

Some experts feel that the surge in SIP discontinuations is not a panic reaction at all. Sridharan Sundaram, Founder of Wealth Ladder Direct, says that this jump is mostly because of the nature of SIPs themselves. In earlier days, SIPs weren’t set as “perpetual.” They had fixed durations — like 3 or 5 years. So, people who started SIPs in 2020 are now hitting the end of that cycle. It’s not a reaction to market conditions, but just the natural end of a financial plan.

Sridharan also points out that if people were truly scared or disappointed, SIP inflows would have fallen. But they didn’t. That shows that new SIPs are being started and people still trust mutual funds as a long-term investment option.

Investors Are Growing Wiser

Chethan Shenoy, Executive Director at Anand Rathi Wealth, brings another interesting view. He says that this wave of SIP exits is actually a positive sign. Many young and new investors who started in the last few years have seen their portfolios grow, even through volatile markets. Now, they are exiting not out of fear, but because they’ve reached their financial goals.

He calls this a “maturing investor behavior.” Instead of panic-selling or making emotional decisions, investors are showing discipline. They’re rebalancing their portfolios, shifting to other schemes, or moving to safer options after reaching their target. This is a sign of growing financial literacy in India.

Rebalancing = Smart Strategy, Not Weakness

Let’s say someone invested in small-cap or mid-cap funds during a high-growth period. Now that those funds have given strong returns, it’s a wise move to book some profits and shift to less risky assets. This isn’t about giving up. It’s about making your portfolio stronger and more balanced. That’s exactly what many investors are doing — and that’s a good thing.

SIPs Are Not Forever

Another important point to remember is that SIPs often have fixed tenures. A 5-year SIP started in 2020 will naturally expire in 2025 unless the investor renews it. So, many of the SIPs that are now ending were never meant to run forever. The number of discontinuations should be seen in that context.

This also means mutual fund investors are becoming more goal-oriented. They’re not just investing randomly but doing it with a plan. Once the plan is complete, they’re taking action — either exiting or reshuffling.

So, What Should You Do?

If you’re already investing through SIPs, don’t let this headline scare you. Understand your goals and your timeline. If your financial goal is still far away, stay invested. If your SIP is giving poor returns in the short term, don’t panic. Markets always recover in the long run. And if you’ve reached your goal, you can exit smartly — just like these 1.62 crore investors are doing.

Use this opportunity to check your investments. Are you investing in the right funds? Is your portfolio balanced? Are your expectations realistic? These are the questions you should ask instead of worrying about what others are doing.

Final Thoughts: This Is Not the End of SIPs

Discontinuing SIPs is not always a bad thing. In fact, it shows that Indian investors are becoming mature and responsible with their money. They are not just investing blindly anymore — they are tracking performance, adjusting plans, and working towards clear financial goals. The ₹26,632 crore SIP inflow in April proves that confidence in mutual funds is still strong.

Don’t let the numbers fool you. SIPs are still one of the best tools for long-term wealth creation. But like all tools, they need to be used wisely. So stay calm, stay informed, and stay invested — your future self will thank you for it.