SIPs in equity mutual funds deliver steady gains despite market wobbles

Majority of diversified equity schemes deliver over 5% SIP return in 1 year even as market falters

Systematic investment plans (SIPs) in equity mutual funds have managed to post stable returns over the past year, as cost averaging helped investors ride out market turbulence. 

Over 50 per cent of the schemes in key active equity categories delivered more than 5 per cent return to SIP investors in the one-year period, according to data from Value Research. 

This performance comes despite the broader market showing little to no gains. The Nifty 50 index was flat for the one-year period ended August 4, while the NSE 500 slipped 1.7 per cent. As a result, one-time investment in most active equity schemes have not yielded much returns. 

The median one-year return from a lumpsum investment in the flexicap category stands at 4.3 per cent. Over the same period, median SIP returns in flexicap schemes are around 6 per cent. 

“The past one year was marked by significant volatility with the Nifty 50 index swinging across a roughly 4,500-point range. This 

turbulence created windows for well-timed, selective entries for investors and investing opportunities for fund managers,” said Nirav Karkera, head of research at Fisdom. “SIP investors also benefited from the rupee-cost averaging.”   

Retail participation held steady even during the correction between September 2024 and February 2025. Monthly SIP inflows hovered around ₹26,000 crore during that phase, and have hit fresh highs in the past three months. However, while contributions remained resilient, the correction did lead to a rise in SIP account closures. 

SIPs are the recommended route to invest in equity mutual funds, especially given the volatility. Experts cite advantages such as rupee-cost averaging and investing discipline. 

“Investors who have been disciplined in taking the SIP route to regularly invest have done better,” said Aditya Khemani, fund manager–equity, Invesco India Mutual Fund. “While the short-term outcome is difficult to predict, SIP investments with a longer-term view are likely to generate better returns.” 

Still, fund selection proved critical. Of the 250 schemes across flexicap, largecap, smallcap, large & midcap, midcap, multicap, focused, and ELSS categories, 26 delivered over 10 per cent SIP returns over the past year. At the same time, 20 schemes in these categories posted negative returns.