Home >Money >Calculators >Actual SIP numbers may be lower due to bounce rate
An SIP ‘bounce’ is a failure to debit the customer’s bank account for a scheduled SIP due to insufficient balance. Photo: iStock
An SIP ‘bounce’ is a failure to debit the customer’s bank account for a scheduled SIP due to insufficient balance. Photo: iStock

Actual SIP numbers may be lower due to bounce rate

  • The SIP AUM rose from 2,75,983 crore in April to 2,76,218 crore in May, which is a rise of just 235 crore. However, monthly SIP flows disclosed by AMFI was several multiples higher at 8,123 crore in May.

The net inflows into the systematic investment plans (SIPs) in May 2020 stood at 8,123 crore, only marginally lower than the 8,376 crore recorded in April. The SIP inflows seemed to have held up despite an economic shock caused by the nationwide lockdown.

However, a detailed analysis of the number suggests that bounced SIPs may not have been factored in. An SIP ‘bounce’ is a failure to debit the customer’s bank account for a scheduled SIP due to insufficient balance. Such a bounce in some cases attracts charges from banks.

In a media presentation last month, Aashish Sommaiyaa, MD and CEO, Motilal Oswal AMC suggested that the AMFI monthly flow data should be crosschecked with the SIP assets under management (AUM) data, which is also disclosed by the same body. A mismatch between the two may be partially on account of bounced SIPs.

The SIP AUM rose from 2,75,983 crore in April to 2,76,218 crore in May, which is a rise of just 235 crore. However, monthly SIP flows disclosed by AMFI was several multiples higher at 8,123 crore in May. So where did 7,889 crore go?

One explanation could be market drop which has the effect of reducing AUM. Over this period (1 May to 31 May) Sensex fell by 3.84% and Nifty fell 2.84%. "I’m not sure if you can attribute Sensex decline and compare it to AUM decline. Equity scheme SIPs are across large, mid and small caps. The market movement can vary scheme to scheme," said a spokesperson for Computer Age Management Services (CAMS), a registrar and transfer agent.

Only a detailed disclosure from AMFI will provide clarity on the matter.

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