Which date is best for SIP: Investors often wonder whether choosing a specific date for their monthly Systematic Investment Plan (SIP) can enhance their returns — such as the beginning of the month, payday, the end of the month or days of market volatility, such as F&O expiry. However, a long-term analysis by WhiteOak Capital Mutual Fund suggests that the exact SIP date may not significantly impact returns over the long run.
Which date is best for SIP
According to WhiteOak Capital Mutual Fund’s latest SIP Analysis Report, there is “no meaningful difference” in returns earned from SIPs made on different dates of a month over a 10-year investment period.
Created with AI. Errors are possibleSIP returns across dates show marginal difference
WhiteOak Capital compared SIP performance based on different monthly investment dates, from the 1st to the 28th of each month.
The findings show only a minor variation in returns.
- SIPs made on the 1st of every month delivered an average return of 13.59 per cent (XIRR).
- Investments on the 14th and 15th generated returns around 13.58 per cent
- SIPs from the 23rd to the 28th gave slightly higher returns, between 13.60 per cent and 13.61 per cent.
- The fund house also concluded that the gap is too narrow to materially affect wealth creation.
“The study of the last 28 years’ index data reveals no meaningful difference between the average return of different dates’ 10-year SIPs,” WhiteOak Capital Mutual Fund said in its report.
Why investors should stop overthinking SIP dates?
The report indicate a common concern among retail investors who try to “time” SIP investments to maximise returns.
Many investors believe investing after salary credit, at the start of the month, or near market corrections may provide better outcomes. Others split SIPs into multiple dates to reduce volatility.
But WhiteOak’s data suggests that consistency matters more than timing.
The fund house said the ideal SIP date is usually linked to when an investor receives income.
In simple terms, experts suggest investors should choose a convenient date that ensures regular investing rather than worrying about short-term market movements.
Market returns still strong
The report also highlighted long-term rolling returns for benchmark indices.
According to WhiteOak Capital, average returns calculated through 10-year rolling periods between June 2014 and May 2024 stood at:
12.62 per cent for Sensex
12.42 per cent for Nifty 50
The fund house attributed the data to the Association of Mutual Funds in India (AMFI).
However, it cautioned investors against expecting similar performance in the future.
“Past performance may or may not be sustained in future and is not a guarantee of any future returns. Index performance does not signify scheme performance,” the report said.
Costs, taxes not included in calculation
WhiteOak Capital clarified that the calculations are indicative and do not account for factors such as stamp duty, levies, taxes, or capital gains liabilities.
The fund house said the analysis is intended only to help investors understand a concept and should not be treated as investment advice.
“These calculations/views alone are not sufficient and should not be used for developing or implementing an investment strategy,” the report stated.
What investors should know?
Over long periods, the difference in returns from investing on different dates of the month is negligible. Financial discipline, staying invested, and maintaining consistency are likely to matter far more than whether the SIP is on the 1st, 15th, or 28th of the month.
For salaried investors, choosing a SIP date close to salary credit may be the most practical approach, ensuring investments happen regularly without affecting monthly cash flow.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
