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Summary: Over a year into SIPs and your portfolio is flat? You’re not alone. Thousands of investors who began in mid-2024 are wondering the same thing. But before you blame your funds or the market, let’s decode what’s really happening, and what you can fix in the next year or two.
A Reddit user named Wanderer_369 recently posted this:
“I started investing in July 2024, and my portfolio has only gone down. Initially, I thought time would even it out, but more than a year later, there’s no growth. I invest Rs 15,000 every month (though I’ve paused my SIPs once or twice). I’m a high-risk investor planning to stay invested for 10–15 years. What am I doing wrong?”
It’s a familiar question. Many new investors start SIPs with high hopes, but after a year or so, they’re puzzled to find returns hovering near zero. Let’s decode what’s happening and, more importantly, what you should (and shouldn’t) do next.
1. The market itself has gone nowhere
Before blaming your SIPs or fund choices, look at the big picture. Between July 2024 and now (October 2025), the Nifty 500, which represents nearly the entire listed equity market, has inched up by just over 2 per cent.
That means the market, on average, hasn’t offered much growth. So, if your SIP portfolio is up roughly 1 per cent after a year, that’s not underperformance, it’s simply reflecting the market reality.
The takeaway: Even good funds can appear stagnant when markets go through a sideways phase. SIPs work best because they keep accumulating during such dull periods, setting you up for gains when the cycle turns.
2. One year is too short to judge an SIP
A year and a half might feel long emotionally, but in investment terms, it’s barely any time at all. SIPs are meant to be tested over years, not months.
At Value Research, we’ve studied this for decades. A fund that underperforms its benchmark for three consecutive years has a 75 per cent probability of continuing to lag over the next five years too. So, if your fund has been weak for a few months — or even a year — that’s not yet a red flag. But if it stays behind its peers and benchmark for three straight years, then it’s time to reassess.
Bottom line: Give your SIP breathing room. Patience is part of the plan.
3. Pausing SIPs defeats the purpose
In the Reddit post, the investor mentions pausing SIPs “once or twice”. That’s where things start going wrong.
SIPs are designed to ride out volatility through rupee-cost averaging, wherein you buy more units when markets fall and fewer when they rise. Interrupting this process removes the very advantage that makes SIPs powerful.
Our guest columnist Shyamali Basu once explained it best in one of her articles a couple of years back: “If you missed just the 40 best days in the Sensex between 1990 and 2022, your returns would fall from 13.7 per cent to just 4.5 per cent. Imagine losing that much return by being out of the market for a few weeks.”
Skipping SIP instalments is like missing those ‘best days’. Small gaps can leave lasting dents in your long-term returns.
4. You might not be as ‘high-risk’ as you think
The Reddit user describes himself as a high-risk investor. But if market volatility made him pause SIPs within a year, that signals a moderate risk appetite.
That’s not a bad thing. It just means the portfolio needs better alignment. For new investors, especially those still learning how they emotionally respond to market swings, starting with aggressive hybrid funds makes much more sense.
Aggressive hybrid funds invest 65–80 per cent in equities and the rest in debt instruments such as bonds. That debt cushion stabilises returns when markets turn rough, exactly what new investors need to stay invested without panic.
And the data backs that up. When the Sensex has fallen more than 5 per cent over the last decade, aggressive hybrids have consistently fallen less than flexi-cap or small-cap funds.
So, if you’re new to market cycles, start with an aggressive hybrid fund. An average aggressive fund’s returns are not too shabby either: 17.3 per cent annualised returns over five years and 11.9 per cent over 10 years.
5. Too many funds spoil the portfolio
|
Fund
|
Monthly SIP | Investment amount | Current value |
|---|---|---|---|
| SBI Nifty Smallcap 250 Index | Rs 2,000 | Rs 28,990 | Rs 28,880 |
| Zerodha Nifty LargeMidCap 250 Index | Rs 1,000 | Rs 11,990 | Rs 12,480 |
| Quant Mid Cap | Rs 2,000 | Rs 28,990 | Rs 27,450 |
| HDFC Mid Cap | Rs 2,000 | Rs 22,990 | Rs 24,360 |
| HDFC Small Cap | Rs 1,000 | Rs 12,990 | Rs 13,580 |
| Quant Multi Cap | Rs 1,000 | Rs 15,990 | Rs 15,250 |
| HDFC Infrastructure | Rs 2,000 | Rs 25,990 | Rs 26,630 |
| Quant ELSS Tax Saver | Rs 2,000 | Rs 21,990 | Rs 22,540 |
| Nippon India Growth Mid Cap | Rs 1,000 | Rs 13,000 | Rs 13,600 |
| SBI ELSS Tax Saver | Rs 1,000 | Rs 13,000 | Rs 13,290 |
From what the Reddit poster shared, Rs 15,000 a month is being spread across 10 mutual funds. That’s excessive.
At this stage, since the SIP amount is not very large and the investor is a beginner, two to three funds are enough:
- An aggressive hybrid fund (for stability)
- A flexi-cap or multi-cap fund (for diversification)
- If needed, a large-cap index fund (for low-cost market exposure)
The problem with owning too many funds is what the famous investor, Peter Lynch, popularly called “diworsification”.
Because here’s what happens when you own too many funds:
- You end up holding the same stocks across multiple funds (portfolio overlap).
- You pay multiple expense ratios for similar holdings.
- You make monitoring difficult. You can’t tell which fund is really adding value, especially if the fund comprises just five to 10 per cent of your portfolio.
- If several funds are from the same fund house, which is in this case, they may even share fund managers or investment philosophies, increasing duplication.
When you’re spreading Rs 15,000 across 10 funds, each gets around Rs 1,000 to Rs 2,000, which is too small an amount to move the needle or to track meaningfully.
6. Avoid the small-cap and sectoral trap
We noticed the portfolio includes three mid- and small-cap funds and an infrastructure fund. That’s too risky for a relatively new investor.
Yes, small-caps can deliver dazzling returns, but they also have a long history of gut-wrenching crashes. Since 2005, the small-cap index has fallen over 40 per cent multiple times, taking as long as six years to recover in some cycles.
Sectoral funds (like infrastructure) are even riskier. They tend to crash harder in bad years. In fact, infrastructure funds underperformed diversified equity funds in most negative years. (You can read more about infrastructure funds here.)
Our rule of thumb: Never allocate more than 5 per cent of your portfolio to any thematic or sectoral fund, and only if you truly understand the sector.
Our take
If you’ve been investing for a year and your returns are near zero, it’s not failure; it’s just too early to judge. The markets have been flat, your SIPs haven’t had time to average out, and perhaps your portfolio is too cluttered.
Here’s your checklist:
- Give your funds at least three years before evaluating.
- Don’t pause your SIPs. Consistency beats timing.
- Trim to three funds at most.
- Avoid sectoral or small-cap overload.
However, don’t ignore taxes and exit loads. If you want to trim the excess funds, move carefully and consider the following charges:
- Exit loads: Many equity funds charge 1 per cent if you exit within a year.
- Capital gains: Equity gains under a year are taxed at 20 per cent, and long-term gains (beyond a year) are taxed at 12.5 per cent, if the gains exceed Rs 1.25 lakh.
If you need to rebalance, do it in stages. Say, spread exits across two financial years to make use of exemptions efficiently.
In this Reddit investor’s case, though, there’s little to worry about on the tax front since investment gains are under Rs 1.25 lakh. The only thing to watch out for is the exit load, especially for any funds that were started within the last 12 months.
Want to know which aggressive hybrid and flexi-cap funds are recommended by us?
Explore Value Research Fund Advisor, our premium mutual fund advisory service that helps you identify the best funds for your goals, time horizon and risk appetite.
Fund Advisor doesn’t just show you a list of ‘top performers’. It builds a personalised investment plan, recommending a select set of funds that complement each other and form a balanced, goal-driven portfolio.
So, whether you’re a new investor starting with an aggressive hybrid fund, or someone looking to add a flexi-cap fund for long-term growth, Fund Advisor ensures you invest right and stay invested right.
Also read: 'Feeling cheated by the market. 7 years of SIP and I'm done'
This article was originally published on October 25, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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