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A headline number that may worry most mutual fund investors: 48 lakh SIPs were discontinued or matured in June, pushing the SIP stoppage ratio to a sharp 77.7 per cent. But before you assume investors are pulling out, the reality is a little more nuanced — and in fact, quite reassuring. Here’s what’s really happening with SIPs in India, and why long-term investing still looks healthy.
The mutual fund SIP stoppage ratio — the percentage of SIPs discontinued versus the number registered — jumped to 77.77 per cent in June 2025, up from 72.12 per cent in May. That’s a fairly sharp move and might make it look like investors are pulling the plug on their long-term investments.
On paper, that does sound like cause for concern: 48.15 lakh SIPs were discontinued or completed their tenure in June, compared to 42.66 lakh in May. But there’s more nuance to this data than meets the eye.
Don’t simply read the headline numbers
For one, the stoppage ratio includes SIPs that were not 'cancelled' but simply expired after completing their original tenure. These aren't signs of panic selling, but natural maturities.
Also, SIP switches and reshuffling are a major factor. Many investors might be rotating from underperforming funds to better ones or rebalancing their asset allocation. This is supported by the other big number in the same report: despite the high stoppage, 61.9 lakh new SIPs were registered last month, as opposed to about 48 SIP accounts closing. That means net additions remain positive, and the investor base continues to grow.
SIPs are still going strong over the long term
There’s also a broader trend that’s more important than one month’s spike: Indian investors are getting more patient.
In fact, the AMFI annual report shows that more investors are staying invested via SIPs for longer durations.
The proportion of SIP assets held for more than five years has risen sharply between March 2020 and March 2025, across both direct and regular plans, and in both T30 (top cities) and B30 (beyond top 30) locations.
For instance: in T30 cities, SIPs held for more than five years rose from 11 per cent in March 2020 to 30 per cent in March 2025. In B30 cities, the smaller towns of the country, the number went from 11 per cent to 29 per cent during the same period.
Similarly, the less-than-one-year SIP assets have halved in the top 30 towns, indicating that fewer people are exiting quickly.
This data tells a clear story: the average SIP investor is sticking around longer.
The last word
So, while SIP discontinuation numbers in a single month may raise eyebrows, they don't signal a crisis. Instead, they reflect a maturing market where investors are managing portfolios more actively and staying invested longer.
At Value Research, we’ve long advocated the SIP route — not just to make investing convenient, but to build wealth slowly and steadily through market cycles.
What matters most is not one SIP, but the system behind your SIPs. Are your funds aligned to your risk profile? Are you reviewing them once a year? Are you holding for the long term?
If you want help building a portfolio that works for your goals or making sense of which SIPs to start, stop or switch — we can help.
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This article was originally published on July 14, 2025.
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