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Most fund tables rank the return on a lump sum. A lump sum is one investment on one date. But most investors invest each month through a SIP. For a SIP, the order of the table can change.
Two example markets show why. Market A increases at a constant rate from 100 to 120 in five years. Market B decreases to 75 in two years. Then it increases to 120 in the next three years.
A lump sum invested at 100 and sold at 120 earned approximately 3.7 per cent each year in both markets. In a lump-sum table, the two markets have the same rank. Now invest ₹10,000 each month in each market.
|
|
Market A: constant increase | Market B: decrease, then increase |
|---|---|---|
| Lump-sum return, each year | 3.70% | 3.70% |
| SIP: you invested | ₹6.0 lakh | ₹6.0 lakh |
| SIP: units bought | 5,493 | 6,619 |
| SIP: value at the end | ₹6.6 lakh | ₹7.9 lakh |
| SIP return (XIRR), each year | 3.70% | 11.20% |
| An example with invented prices. This is not market data. Instalment on the first day of each month for 60 months. Prices change at a constant rate in each phase. This example does not show the returns of any scheme or any future returns. | ||
In Market B, the SIP investor has ₹7.9 lakh. In Market A, the SIP investor has ₹6.6 lakh. The difference comes from the units. When prices decreased, each ₹10,000 bought more units. The Market B investor bought approximately 20 per cent more units. When prices increased again, the value of all these units increased.
Thus, the more difficult market gave the SIP investor a better result. The fall let him buy units at low prices.
The year 2020 gives a real example of Market B. Consider two investors in January 2020. Each investor had ₹1.2 lakh to invest in the Nifty 50 TRI. The first investor invested the full amount at the start of the year. The second investor invested ₹10,000 each month.
In March 2020, during the COVID fall, the index decreased by 23 per cent in one month. At the end of March, it was 29 per cent below its level at the start of the year. The monthly investor continued. The instalment at the start of April bought approximately 41 per cent more units than the instalment in January.
By December 2020, the index had recovered. The lump sum became approximately ₹1.39 lakh, a 16 per cent gain. The SIP became approximately ₹1.55 lakh, a 29 per cent gain.
The table below shows real data for the diversified equity categories. It ranks each category by lump-sum return and by SIP return, for 10 years and for 5 years.
| Category | 10 years: lump sum | 10 years: SIP | 5 years: lump sum | 5 years: SIP |
|---|---|---|---|---|
| Small Cap | 16.60 (1) | 17.20 (1) | 13.41 (1) | 14.13 (1) |
| Mid Cap | 15.57 (2) | 16.49 (2) | 13.14 (2) | 14.07 (2) |
| Value Oriented | 14.50 (3) | 14.20 (3) | 12.32 (3) | 11.14 (6) |
| Large & MidCap | 13.63 (4) | 14.16 (4) | 10.21 (5) | 12.19 (4) |
| ELSS - Tax Saver | 12.97 (7) | 13.42 (5) | 9.58 (7) | 10.55 (8) |
| Focused | 13.32 (5) | 13.36 (6) | 10.02 (6) | 11.42 (5) |
| Flexi Cap | 13.00 (6) | 13.16 (7) | 9.53 (8) | 11.01 (7) |
| Large Cap | 12.85 (8) | 11.80 (8) | 9.50 (9) | 9.71 (9) |
| Multi Cap | – | – | 12.22 (4) | 12.90 (3) |
| Category average returns, per cent each year, regular plans, to 11 November 2026. Rank in brackets. Lump sum: point-to-point annualised return. SIP: annualised return (XIRR) on a monthly instalment. Multi-cap funds in their current form are less than 10 years old. Source: Value Research. Past performance may or may not be sustained in future and is not a guarantee of any future returns. | ||||
In the 10-year data, the first two ranks and the last rank remain unchanged. Small-cap and mid-cap funds are first and second in both columns. Large-cap funds are last in both columns. In the middle, ELSS funds move from seventh to fifth.
The difference between the categories increases with a SIP. With a lump sum, small-cap funds earned 3.75 percentage points more each year than large-cap funds. With a SIP, they earned 5.4 percentage points more. In two categories, large-cap and value, the SIP return was less than the lump-sum return.
In the 5-year data, the order changes more. Value funds are third by lump-sum return and sixth by SIP return. Multi-cap and large & mid-cap funds move up. A category moves down in the SIP column when most of its gains come early in the period. At that time, the SIP investor has only a small amount invested.
This table does not tell you which category to select. Each decade has different falls. If you invest each month, use the SIP return to measure your SIP. Do not use the lump-sum return.
Past performance may or may not be sustained in future and is not a guarantee of any future returns. Mutual Fund investments are subject to market risks; read all scheme-related documents carefully
This article was originally published on November 12, 2026.
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