SIP Stoppage Hits 116% as Equity Market Faces Turbulence

Investors in India's mutual fund sector are grappling with significant challenges as the SIP (Systematic Investment Plan) stoppage ratio soared to 116% in October 2026, according to data from the Association of Mutual Funds in India (AMFI). This alarming statistic indicates that 5.9 million SIPs were either discontinued or completed their tenure, while net inflows into equity schemes plummeted by 14% month-on-month to ₹32,924 crore. The current market landscape has raised questions about the viability of continuing SIPs amidst declining returns and broader economic uncertainties.

The year 2026 has been particularly tough for equity market investors, influenced by global uncertainties including the ongoing US-Iran war, trade tariffs, and fears surrounding AI-led disruptions. These factors have contributed to a negative sentiment that has weighed heavily on market performance. For instance, the Nifty 50 Total Return Index (TRI) recorded a staggering -13.29% return from November 2025 to October 2026, meaning an initial investment of ₹1 lakh would have diminished to less than ₹87,000.

In contrast, the Nifty Midcap 150 and Nifty Smallcap 250 indices reported returns of -3.62% and +6.16%, respectively, during the same period. Year-to-date figures show the Nifty 50 TRI at -0.72%, while the mid-cap and small-cap indices have fared better, returning 2.34% and 5.37% respectively. This divergence in performance highlights the challenges faced by large-cap mutual funds, which are often benchmarked against the Nifty 50 TRI.

Despite the current market turmoil, experts urge investors not to panic. Kaustubh Belapurkar, Director of Manager Research at Morningstar India, emphasizes the importance of maintaining a long-term perspective. He argues that equity markets are inherently volatile, and attempting to time the market can be counterproductive. Belapurkar advises investors to continue their SIP investments, stressing that historical data supports the notion that staying invested through market fluctuations can yield positive long-term returns.

"Stopping the SIP when the market is stagnant or declining can hinder long-term wealth accumulation," he explains. "Investors miss out on the opportunity to buy more units at lower prices, which is a fundamental advantage of SIPs through rupee cost averaging."

Historical trends further substantiate this viewpoint. For example, after the Nifty 50 peaked at 6301.55 in November 2010, it fell to 4544.20 by December 2011—a correction of nearly 28%. It took almost three years for the index to recover to its previous high. However, data shows that over 80% of investors who remained invested for a decade earned returns between 12-15%. This percentage dropped significantly for shorter investment horizons, illustrating the benefits of long-term commitment.

The debate between active and passive fund management continues to be a focal point for investors. According to Morningstar's Active/Passive Barometer, which analyzed 471 unique funds as of June 30, more than 50% of active equity funds outperformed their passive counterparts over one-, three-, and five-year periods. This trend suggests that well-managed active funds can provide a buffer against market downturns, as they tend to fall less than their benchmarks during bear markets.

Belapurkar notes that investors should consider selling a fund only if there is a significant change in its investment process or if a change in fund management warrants reevaluation. "Every investment style experiences periods of underperformance due to various market conditions. If you hold a fund with a solid investment process and a competent team, it's usually better to stay invested rather than chase after performance," he advises.

Behavioral biases often influence investor decisions, leading to emotional reactions during market downturns. Many investors may feel compelled to stop their SIPs due to short-term losses, despite the potential long-term benefits of remaining invested. Belapurkar highlights the importance of understanding these biases and encourages investors to focus on their long-term financial goals rather than reacting to market fluctuations.

"Investing is a marathon, not a sprint. Those who can maintain their composure during turbulent times are often rewarded in the long run," he states.

Looking ahead,, while the current market conditions pose challenges for mutual fund investors, experts advocate for a disciplined approach to SIP investments. By focusing on long-term goals and resisting the urge to react impulsively to market volatility, investors can position themselves for potential future gains. The historical performance of equity markets suggests that patience and consistency in investment strategies can yield significant rewards over time.