WhiteOak MF explains whether to continue an SIP after a weak start | Latest News Updates

Should you wait for a market correction to start a systematic investment plan (SIP)? Does the investment date affect returns? And can a longer investment horizon reduce the risk of losses?

A historical analysis by WhiteOak Capital Mutual Fund, based on BSE Sensex Total Return Index (TRI) data from August 1996 to September 2026, examined these questions. The report found that longer investment horizons had a higher proportion of positive returns, while the choice of SIP date and frequency made little difference to long-term returns in the periods studied.

Does a longer SIP horizon reduce the risk of losses?

According to WhiteOak Capital MF, monthly SIPs in the Sensex TRI generated positive returns in 87% of the three-year rolling periods analysed. The proportion rose to 92% for five-year periods and 100% for investment horizons of eight, 10, 12 and 15 years.

The minimum annualised return was negative 24.59% for three-year SIPs and negative 9.48% for five-year SIPs. For eight-year SIPs, the minimum return was 3.03%.

Should you start an SIP at a market peak or wait for a correction?

WhiteOak Capital MF compared SIPs started around market peaks with those begun near subsequent bottoms in market cycles where the Sensex had fallen more than 20%.

In one example, a monthly SIP of ₹10,000 started in January 2008 would have grown to ₹70.25 lakh by September 30, 2026, against an investment of ₹22.50 lakh, delivering an annualised return of 11.02%.

The same SIP started in March 2009 would have grown to ₹60.35 lakh against an investment of ₹21.10 lakh, with an annualised return of 10.94%.

The fund house said starting earlier could lead to greater accumulated wealth because of additional contributions and a longer investment period. These examples relate to specific historical market cycles and do not establish that investing at a peak will always outperform investing at a bottom.

Does the SIP date or frequency matter?

The study found that 10-year SIP returns varied little depending on the date of the month chosen. Annualised returns ranged from approximately 13.03% to 13.09% across different dates.

Daily, weekly and monthly SIPs also generated annualised returns of 13.06% in the fund house’s comparison, which kept the total investment equal across all three frequencies.

WhiteOak Capital MF’s analysis therefore found no meaningful long-term advantage from choosing a particular monthly date or investment frequency in the periods examined.

Which performed better: large-cap, mid-cap or small-cap SIPs?

In its comparison of 10-year rolling SIP returns, WhiteOak Capital MF found that the Nifty Midcap 150 TRI delivered an average annualised return of 17.61%, against 15% for the Nifty Smallcap 250 TRI and 13% for the Nifty 100 TRI.

The minimum return was 5.93% for the mid-cap index, compared with negative 0.46% for the small-cap index and 4.26% for the large-cap index.

The results favoured mid-caps on average over the periods studied, but historical returns alone do not establish suitability for individual investors. Mid- and small-cap stocks can also experience greater volatility.

Should you stop an SIP after a weak start?

WhiteOak Capital MF found that SIPs with relatively low returns during their first five years delivered better returns over a 10-year period, on average, than their initial performance might suggest.

The finding does not guarantee a recovery for every investment. Investors should review their SIPs in the context of their financial goals, investment horizon and risk tolerance.

The report’s calculations are based on historical index performance, are illustrative and pre-tax, and do not represent returns from any particular mutual fund scheme. Past performance is not a guarantee of future returns.

NOTE TO READERS

Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.