After six months of stagnation, the mutual fund industry saw an increase of 1.2 million contributing systematic investment plan (SIP) accounts in July.
The industry’s investor base had increased by close to 3 million in the first half of 2026, even as the number of contributing SIP accounts stayed almost flat at 97.8 million in June from 97.9 million in December 2025. In comparison, contributing SIP accounts had increased by more than 15 million in 2025, while the investor base expanded by about 6.4 million during the year.
Experts attributed the stagnation in contributing SIP accounts during the first half of 2026 largely to an increase in SIP discontinuations amid market volatility. The benchmark BSE Sensex and Nifty 50 declined 10.25% and 8.66%, respectively, during the period, adding to concerns among SIP investors. The Sensex recorded its worst first-half performance since the Covid-19 pandemic, while the Nifty 50 posted its steepest first-half decline since 2022.
DP Singh, Joint CEO of SBI Mutual Fund, said SIP registrations had not declined in recent months, but market volatility led to a rise in SIP stoppages during the first half of 2026. A broadly similar number of investors discontinuing SIPs and starting new ones resulted in the total number of contributing SIP accounts remaining largely unchanged, he said.
Saugata Chatterjee, president and deputy CEO of Nippon India Mutual Fund, echoed similar views, adding that the momentum in SIP registrations remained strong, with around 5-6 million new SIPs being registered every month. However, contributing accounts largely reflected elevated terminations during the recent period of market volatility.
Some investors who had earned healthy returns in the preceding years also chose to book profits and pause their SIPs as volatility increased, Chatterjee added.
Recency bias was another major factor influencing investor behaviour, according to Chatterjee. “Investors who entered the markets in the last 12–24 months due to strong returns of the preceding 2-3 years saw underwhelming returns amidst changing market conditions. That change in experience shaped how investors respond to market volatility,” he said.
Vaibhav Chugh, CEO of Abakkus Mutual Fund, also explained many older mandates reached completion which added to the slowdown.
“As investors became more experienced or had additional surplus, through bonuses, savings, or other sources, they may have chosen to complement their regular SIPs with lump-sum investments,” he added.