SIP Stoppage Surges Amid Iran War Volatility: Smart Pause Or Costly Exit For Investors?

Last Updated:April 14, 2026, 11:44 IST

Mutual fund SIP stoppage ratio hits 100 percent in March as markets stay volatile, yet equity schemes see record net inflows, overall AUM falls on mark to market losses

SIP stoppage ratio hits 100%

An interesting trend has emerged in the equity investment ecosystem: the mutual fund SIP stoppage ratio surged to 100% in March, even as net inflows hit a record high. Now, for every new SIP being created, one is being discontinued, which was fewer in February.

The SIP stoppage frenzy is being driven by the volatile market and muted returns. The equity market failed to deliver higher returns than other low but stable financial assets, such as Fixed Deposits (FDs).

While a large number of SIPs are put on hold or closed, the existing investors remain resilient as seen in the net inflow in March. According to the latest AMFI data, equity schemes attracted net inflows of Rs 40,366 crore during the month, marking a sharp 55% jump from Rs 25,965 crore in February.

Contributions through SIPs also moved higher to Rs 32,087 crore from Rs 29,845 crore a month ago.

However, the surge in inflows did not translate into higher assets. Total AUM of the mutual fund industry declined to Rs 73.73 lakh crore in March, down from Rs 82.03 lakh crore in February, a fall of over 10%. The drop was largely due to mark-to-market losses amid a broad-based correction in equities.

Over the past one and a half years, the market has been in a consolidation range. Nifty 50, a key benchmark index, moved only 2 per cent north in the last one year, reflecting a weak momentum.

One of the primary reasons for the market’s weak performance is the outflow of FIIs (Foreign Institutional Investors). Foreign investors have been pulling out money from the Indian market over the high valuation and attractive opportunities in other markets in the last one and a half years. This pullout has been intensified following the breakout of the Iran-US war. In March alone, FIIs withdrew over $12 billion from the Indian equity market as the economy faced challenges due to rising crude oil prices, disruption in energy supply, weakening rupee and impact on exports.

While investors tend to hedge when things go south, the approach seems to have a negative one for the long-term investors. Most experts believe that the bearish market offers the most fertile and yielding ground for investors, allowing them to purchase equities at a much better valuation.

They say it’s not a good move to withdraw and stop their SIPs for mutual fund.

“But it’s actually the worst move that one can make,” Rohan Goyal – Investment Research Analyst of MIRA Money told News18 earlier.

Investors need to understand this thing: When the markets are down, your SIPs help you buy more units of mutual funds for the same amount. “More units at a lower price means that when the market eventually recovers, your gains are bigger,” explains Goyal, adding that stopping your SIP means you miss out on buying at the “sale price”.

This could be an opportune time to gradually start allocating capital to the broader market, N. ArunaGiri, CEO of TrustLine Holdings was quoted as saying in the earlier News18 report.

ArunaGiri states that every geopolitical crisis has eventually turned out to be a compelling buying opportunity, especially in the broader small and mid-cap segments in the Indian context.

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