Rs 1 cr SIP secret: Midcap funds beat the rest with 17% returns for 10 yrs

WhiteOak Capital's data shows midcap SIPs delivered 17.4% average 10-year returns - higher than large and small caps.

If you’ve ever been tempted to chase the latest “hot” mutual fund category — switching between large-cap, small-cap, or thematic funds each year — new data from WhiteOak Capital Mutual Fund offers a simple reminder: staying put often pays more than switching lanes.

 

According to the fund house’s latest SIP Analysis Report, midcap funds have emerged as one of the best long-term performers among equity segments for Systematic Investment Plans (SIPs), delivering an average 10-year rolling return of 17.4%. The median return stood at 17.9%, with 100% of SIP periods generating positive returns over nearly three decades of market data.

 

 

"An average Large Cap stock is generally less volatile than an average Small and Midcap stock and provides stability to the portfolio. However, The Nifty Midcap 150 TRI delivered strong and consistent performance, with average and median returns of 17.4% and 17.9%, respectively," noted the study.

 

Largecap, Midcap or Smallcap SIP?

 

Midcap SIPs Outperform Over Time

 

The report analyzed 10-year rolling SIP returns across large-cap, mid-cap, and small-cap indices from 1996 to 2025, comparing their long-term consistency. 

While large-caps offered stability and small-caps showed volatility, the Nifty Midcap 150 Total Return Index (TRI) delivered the strongest and most consistent results:

 

17.4% average XIRR (10-year rolling SIP returns)

 

Positive returns in 100% of periods

 

Above 10% returns in 98% of cases

 

Above 12% in 95% of periods

 

Above 15% in 79% of periods

 

Simply put, investors who stayed invested in midcaps through SIPs over a decade were almost guaranteed strong, inflation-beating returns.

 

“The midcap segment may offer many opportunities for higher potential growth over the long term,” the report notes. “Volatility smooths out over time, and staying invested through market cycles often leads to superior compounding.”

 

Is it better to keep changing the lane and switch to better-performing index every year?

 

The case study talks about an investor who had started SIP in the Mid Cap Index and annually switched it to the best-performing index of the previous year. The final XIRR percentage for this investor would have been 15.24% (as of 30-Sep-2025). Conversely, if the investor had continued SIP with the Mid Cap Index only without switching, the XIRR percentage would have been 17.30% (as of 30-Sep-2025). 

The report also tested a common investor instinct — switching SIPs each year to whichever index performed best the previous year.

 

If looked at 10 Years Rolling SIP Return, the average XIRR for SIP continued in Mid Cap Index is 17.43%, as against XIRR of 15.62% for investor who started SIP in Mid Cap Index and switched based on previous year best-performing index. 

The results were telling:

 

An investor who kept switching earned 15.24% XIRR,

 

While one who stayed invested only in the midcap index earned 17.30% XIRR.

 

The lesson? Constantly “changing lanes” in search of short-term performance can actually reduce long-term gains.

 

How Long Is ‘Long Term’?

 

Investors often hear that SIPs work “in the long term,” but WhiteOak’s data quantifies what that means. 

For illustration purpose only. Above returns are %XIRR Rolling Returns on monthly basis for S&P BSE Sensex TRI for SIP between Sep 1996 to Sep 2025. Past performance may or may not be sustained in future.

 

Based on 29 years of Sensex and Nifty data, the fund house found that volatility reduces significantly after 7–10 years of continuous investing. Over longer durations, SIP returns tend to converge upward, regardless of entry point.

 

This means that market timing matters less than time spent in the market. Even if you start when valuations are high, a 10-year SIP helps average out purchase costs through market cycles.

 

Does SIP Frequency Matter? Not Really

 

The study compared daily, weekly, and monthly SIP frequencies over the same period — and found minimal difference in long-term returns.

 

Over a 10-year horizon, all three frequencies generated almost identical XIRRs, reinforcing that consistency matters more than frequency.

 

Whether you invest ₹1,000 every week or ₹4,000 every month, the impact on long-term wealth creation remains nearly the same — as long as you stay invested.  The key takeaway from the analysis is to focus on investing a small amount regularly for the long term. 

For illustration purpose only. % XIRR for BSE SENSEX TRI for SIP between August 1996 to September 2025. SIP instalment amounts are selected in such a way, so that the total investment remains the same in all the three frequencies for better compariso