{"id":23356,"date":"2026-03-24T15:33:37","date_gmt":"2026-03-24T10:03:37","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=23356"},"modified":"2026-03-24T15:33:37","modified_gmt":"2026-03-24T10:03:37","slug":"sip-returns-lag-in-the-short-term","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/sip-returns-lag-in-the-short-term\/","title":{"rendered":"SIP Returns Lag in the Short Term \u2014 But the Hidden Opportunity Is Bigger Than It Looks"},"content":{"rendered":"<div class=\"flex flex-col text-sm pb-25\">\n<section class=\"text-token-text-primary w-full focus:outline-none [--shadow-height:45px] has-data-writing-block:pointer-events-none has-data-writing-block:-mt-(--shadow-height) has-data-writing-block:pt-(--shadow-height) [&amp;:has([data-writing-block])&gt;*]:pointer-events-auto scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]\" dir=\"auto\" data-turn-id=\"request-WEB:5eade922-05df-44f2-acae-7b1c3d8b44fa-7\" data-testid=\"conversation-turn-16\" data-scroll-anchor=\"true\" data-turn=\"assistant\">\n<div class=\"text-base my-auto mx-auto pb-10 [--thread-content-margin:var(--thread-content-margin-xs,calc(var(--spacing)*4))] @w-sm\/main:[--thread-content-margin:var(--thread-content-margin-sm,calc(var(--spacing)*6))] @w-lg\/main:[--thread-content-margin:var(--thread-content-margin-lg,calc(var(--spacing)*16))] px-(--thread-content-margin)\">\n<div class=\"[--thread-content-max-width:40rem] @w-lg\/main:[--thread-content-max-width:48rem] mx-auto max-w-(--thread-content-max-width) flex-1 group\/turn-messages focus-visible:outline-hidden relative flex w-full min-w-0 flex-col agent-turn\">\n<div class=\"flex max-w-full flex-col gap-4 grow\">\n<div class=\"min-h-8 text-message relative flex w-full flex-col items-end gap-2 text-start break-words whitespace-normal outline-none keyboard-focused:focus-ring [.text-message+&amp;]:mt-1\" dir=\"auto\" tabindex=\"0\" data-message-author-role=\"assistant\" data-message-id=\"f88531d4-cb82-4666-8076-9bf3ff43c4c4\" data-message-model-slug=\"gpt-5-3\" data-turn-start-message=\"true\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden\">\n<div class=\"markdown prose dark:prose-invert w-full wrap-break-word light markdown-new-styling\">\n<p data-section-id=\"1pp5y81\" data-start=\"537\" data-end=\"631\">SIP Returns Slip Behind Category Averages as Market Correction Resets Return Expectations<\/p>\n<p data-start=\"633\" data-end=\"844\">India\u2019s retail investing engine\u2014Systematic Investment Plans (SIPs)\u2014is currently navigating a phase of visible underperformance, with returns trailing category averages across large-, mid-, and small-cap funds.<\/p>\n<p data-start=\"846\" data-end=\"1124\">The latest March data highlights the extent of this divergence. Large-cap SIPs delivered -12.43% over one year, compared with +1.19% category returns. Mid-cap SIPs stood at -10.21% versus +5.15%, while small-cap SIPs declined sharply at -16.71% against -0.11%.<\/p>\n<p data-start=\"1126\" data-end=\"1337\">These numbers, while striking, are not indicative of a structural breakdown. Instead, they reflect a market reset phase where return expectations are being recalibrated after a period of elevated valuations.<\/p>\n<p data-start=\"1327\" data-end=\"1520\">Also Check :<\/p>\n<ul>\n<li><a href=\"https:\/\/www.niftytrader.in\/nifty50-contributors\">Nifty 50<\/a><\/li>\n<li><a href=\"https:\/\/www.niftytrader.in\/nifty-bank-contributors\">Bank Nifty<\/a><\/li>\n<li><a href=\"https:\/\/www.niftytrader.in\/stocks-price\/bse\">Sensex<\/a><\/li>\n<\/ul>\n<h2 data-section-id=\"1b1reoz\" data-start=\"1344\" data-end=\"1432\">The Underperformance Is a Function of Market Cycles \u2014 Not a Failure of SIP Strategy<\/h2>\n<p data-start=\"1434\" data-end=\"1540\">To understand the current gap, one must look beyond the numbers and into the mechanics of SIP investing.<\/p>\n<p data-start=\"1542\" data-end=\"1736\">SIPs are designed to invest consistently across market cycles, not to optimise short-term returns. Over the past 12\u201318 months, markets have experienced sustained volatility and correction.<\/p>\n<p data-start=\"1738\" data-end=\"1780\">This has created a temporary distortion:<\/p>\n<ul data-start=\"1782\" data-end=\"1920\">\n<li data-section-id=\"1gcb0cv\" data-start=\"1782\" data-end=\"1823\">Investors continued SIP contributions<\/li>\n<li data-section-id=\"28fy2n\" data-start=\"1824\" data-end=\"1873\">Market prices declined during the same period<\/li>\n<li data-section-id=\"16fcyjz\" data-start=\"1874\" data-end=\"1920\">Recent investments reduced average returns<\/li>\n<\/ul>\n<blockquote data-start=\"1922\" data-end=\"2082\">\n<p data-start=\"1924\" data-end=\"2082\">\u201cSIP investors kept investing through falling markets, which makes returns appear weaker in the short term,\u201d said <span class=\"hover:entity-accent entity-underline inline cursor-pointer align-baseline\"><span class=\"whitespace-normal\">Shweta Rajani<\/span><\/span>.<\/p>\n<\/blockquote>\n<p data-start=\"2084\" data-end=\"2199\">The divergence is more pronounced in mid- and small-cap funds, where sharper corrections have amplified the impact.<\/p>\n<p data-start=\"2084\" data-end=\"2199\">Read More : <a href=\"https:\/\/www.niftytrader.in\/markets\/are-food-delivery-giants-quietly-increasing-charges\/\">Are Food Delivery Giants Quietly Increasing Charges While Customers Focus Only on Discounts and Offers?<\/a><\/p>\n<h2 data-section-id=\"gpmmy9\" data-start=\"2206\" data-end=\"2261\">Here\u2019s What Happened Today and Why Traders Reacted<\/h2>\n<p data-start=\"2263\" data-end=\"2335\">The latest SIP data has prompted a nuanced reaction across the market.<\/p>\n<p data-start=\"2337\" data-end=\"2470\">Traders focused on the optics of underperformance, particularly the negative one-year returns across segments. This has led to:<\/p>\n<ul data-start=\"2472\" data-end=\"2627\">\n<li data-section-id=\"1t914dq\" data-start=\"2472\" data-end=\"2523\">Cautious sentiment in mid- and small-cap stocks<\/li>\n<li data-section-id=\"6joygl\" data-start=\"2524\" data-end=\"2569\">Increased scrutiny of retail-driven flows<\/li>\n<li data-section-id=\"ltnsen\" data-start=\"2570\" data-end=\"2627\">Short-term reassessment of equity return expectations<\/li>\n<\/ul>\n<p data-start=\"2629\" data-end=\"2842\">However, experienced investors and wealth managers see this phase differently. The underperformance is being interpreted as a natural consequence of market correction, not a signal of weakening fundamentals.<\/p>\n<p data-start=\"2844\" data-end=\"2957\">In fact, for many, this phase marks a transition from overheated valuations to more sustainable entry levels.<\/p>\n<h2 data-section-id=\"1x2b1oc\" data-start=\"2964\" data-end=\"3038\">The Structural Gap Explained: Why SIP Returns Trail Category Averages<\/h2>\n<p data-start=\"3040\" data-end=\"3181\">The divergence between SIP returns and category averages often creates confusion, but the explanation lies in how returns are measured.<\/p>\n<ul data-start=\"3183\" data-end=\"3354\">\n<li data-section-id=\"p9i13b\" data-start=\"3183\" data-end=\"3259\">Category returns are point-to-point, similar to lump sum investments<\/li>\n<li data-section-id=\"1xdcrdj\" data-start=\"3260\" data-end=\"3354\">SIP returns are time-distributed, reflecting investments made at multiple price levels<\/li>\n<\/ul>\n<p data-start=\"3356\" data-end=\"3378\">In a falling market:<\/p>\n<ul data-start=\"3380\" data-end=\"3514\">\n<li data-section-id=\"18qopb9\" data-start=\"3380\" data-end=\"3446\">Lump sum returns may still reflect earlier higher price points<\/li>\n<li data-section-id=\"uirsna\" data-start=\"3447\" data-end=\"3514\">SIP returns incorporate ongoing investments at declining prices<\/li>\n<\/ul>\n<p data-start=\"3516\" data-end=\"3644\">This leads to temporary underperformance\u2014but also builds the foundation for future return acceleration when markets recover.<\/p>\n<h2 data-section-id=\"1lsw9ie\" data-start=\"3651\" data-end=\"3701\">Long-Term Data Reveals the True Power of SIPs<\/h2>\n<p data-start=\"3703\" data-end=\"3769\">Short-term data captures noise. Long-term data captures reality.<\/p>\n<p data-start=\"3771\" data-end=\"3902\">As investment horizons extend, the gap between SIP returns and category averages narrows significantly and almost disappears.<\/p>\n<p data-start=\"3904\" data-end=\"3927\">At a 10-year horizon:<\/p>\n<ul data-start=\"3929\" data-end=\"4031\">\n<li data-section-id=\"16mkq3j\" data-start=\"3929\" data-end=\"3967\">Mid-cap SIPs lag by just 0.21%<\/li>\n<li data-section-id=\"xuneor\" data-start=\"3968\" data-end=\"3999\">Small-cap SIPs by 0.39%<\/li>\n<li data-section-id=\"i222rd\" data-start=\"4000\" data-end=\"4031\">Large-cap SIPs by 1.29%<\/li>\n<\/ul>\n<p data-start=\"4033\" data-end=\"4085\">This convergence is driven by two powerful forces:<\/p>\n<ul data-start=\"4087\" data-end=\"4211\">\n<li data-section-id=\"10e0hlb\" data-start=\"4087\" data-end=\"4156\">Rupee cost averaging, which lowers the average purchase price<\/li>\n<li data-section-id=\"1ub583e\" data-start=\"4157\" data-end=\"4211\">Compounding, which amplifies returns over time<\/li>\n<\/ul>\n<blockquote data-start=\"4213\" data-end=\"4331\">\n<p data-start=\"4215\" data-end=\"4331\">\u201cWhen analysed over longer rolling periods, SIP returns tend to align closely with category averages,\u201d Rajani noted.<\/p>\n<\/blockquote>\n<h2 data-section-id=\"1ytmqbc\" data-start=\"4338\" data-end=\"4415\">Impact on Investor Portfolios: Temporary Pressure, Strategic Positioning<\/h2>\n<p data-start=\"4417\" data-end=\"4517\">For investors, the current environment may feel uncomfortable\u2014but it is strategically significant.<\/p>\n<h3 data-section-id=\"s7k5mx\" data-start=\"4519\" data-end=\"4543\">Short-Term Reality<\/h3>\n<ul data-start=\"4544\" data-end=\"4715\">\n<li data-section-id=\"rjawg\" data-start=\"4544\" data-end=\"4599\">Portfolio returns may appear compressed or negative<\/li>\n<li data-section-id=\"yika2w\" data-start=\"4600\" data-end=\"4658\">Volatility is higher in mid- and small-cap allocations<\/li>\n<li data-section-id=\"15uvsso\" data-start=\"4659\" data-end=\"4715\">Sentiment may weaken due to visible underperformance<\/li>\n<\/ul>\n<h3 data-section-id=\"1qg805g\" data-start=\"4717\" data-end=\"4742\">Long-Term Advantage<\/h3>\n<ul data-start=\"4743\" data-end=\"4904\">\n<li data-section-id=\"6indir\" data-start=\"4743\" data-end=\"4798\">Investors accumulate more units at lower valuations<\/li>\n<li data-section-id=\"j4osga\" data-start=\"4799\" data-end=\"4847\">Future upside potential increases materially<\/li>\n<li data-section-id=\"6soaxq\" data-start=\"4848\" data-end=\"4904\">Recovery phases deliver stronger return acceleration<\/li>\n<\/ul>\n<p data-start=\"4906\" data-end=\"4986\">In essence, this is a position-building phase disguised as underperformance.<\/p>\n<h2 data-section-id=\"17i1u1y\" data-start=\"4993\" data-end=\"5043\">What\u2019s Driving the Current Market Volatility?<\/h2>\n<p data-start=\"5045\" data-end=\"5147\">The pressure on SIP returns is closely linked to a mix of global and domestic macroeconomic factors:<\/p>\n<ul data-start=\"5149\" data-end=\"5414\">\n<li data-section-id=\"1gdhl22\" data-start=\"5149\" data-end=\"5209\">Elevated interest rates, impacting equity valuations<\/li>\n<li data-section-id=\"pr5wh\" data-start=\"5210\" data-end=\"5251\">Persistent inflationary pressures<\/li>\n<li data-section-id=\"g2rzxj\" data-start=\"5252\" data-end=\"5311\">Volatile foreign institutional investor (FII) flows<\/li>\n<li data-section-id=\"nipyx7\" data-start=\"5312\" data-end=\"5360\">Geopolitical tensions and global uncertainty<\/li>\n<li data-section-id=\"1txv6mp\" data-start=\"5361\" data-end=\"5414\">Concerns over global growth and policy tightening<\/li>\n<\/ul>\n<blockquote data-start=\"5416\" data-end=\"5569\">\n<p data-start=\"5418\" data-end=\"5569\">\u201cMacro uncertainty and volatile capital flows have weighed on equity markets, impacting SIP returns,\u201d said <span class=\"hover:entity-accent entity-underline inline cursor-pointer align-baseline\"><span class=\"whitespace-normal\">Shivam Pathak<\/span><\/span>.<\/p>\n<\/blockquote>\n<p data-start=\"5571\" data-end=\"5691\">These factors have disproportionately impacted mid- and small-cap segments, increasing return dispersion and volatility.<\/p>\n<h2 data-section-id=\"1lmfk20\" data-start=\"5698\" data-end=\"5749\">Investor Behaviour Signals Maturity, Not Panic<\/h2>\n<p data-start=\"5751\" data-end=\"5887\">Despite short-term underperformance, SIP investors have largely remained committed\u2014an important indicator of evolving market maturity.<\/p>\n<p data-start=\"5889\" data-end=\"5910\">Key trends suggest:<\/p>\n<ul data-start=\"5912\" data-end=\"6103\">\n<li data-section-id=\"1wii31o\" data-start=\"5912\" data-end=\"5965\">Recent dip in SIP flows was largely technical<\/li>\n<li data-section-id=\"1s3c2eb\" data-start=\"5966\" data-end=\"6018\">Early signs indicate sentiment stabilisation<\/li>\n<li data-section-id=\"112bpe7\" data-start=\"6019\" data-end=\"6103\">Investors are increasingly viewing corrections as accumulation opportunities<\/li>\n<\/ul>\n<p data-start=\"6105\" data-end=\"6213\">There is also evidence of flows gradually rotating back into equities, reinforcing long-term confidence.<\/p>\n<h2 data-section-id=\"kpnks7\" data-start=\"6220\" data-end=\"6267\">What This Means for the Market and Traders<\/h2>\n<p data-start=\"6269\" data-end=\"6357\">From a market perspective, SIP inflows continue to act as a structural stabiliser:<\/p>\n<ul data-start=\"6359\" data-end=\"6487\">\n<li data-section-id=\"t47ju4\" data-start=\"6359\" data-end=\"6414\">Provide consistent liquidity during volatile phases<\/li>\n<li data-section-id=\"18axuua\" data-start=\"6415\" data-end=\"6454\">Cushion downside during corrections<\/li>\n<li data-section-id=\"igg3r0\" data-start=\"6455\" data-end=\"6487\">Support valuations over time<\/li>\n<\/ul>\n<p data-start=\"6489\" data-end=\"6613\">For traders, this creates a unique dynamic where retail flows help limit extreme downside, even in uncertain conditions.<\/p>\n<h2 data-section-id=\"prewzw\" data-start=\"6620\" data-end=\"6692\">The Bigger Picture: SIP Discipline Is Being Rewarded \u2014 Just Not Yet<\/h2>\n<p data-start=\"6694\" data-end=\"6773\">The current phase is not about failure\u2014it is about delayed gratification.<\/p>\n<p data-start=\"6775\" data-end=\"6809\">SIPs are inherently designed to:<\/p>\n<ul data-start=\"6811\" data-end=\"6892\">\n<li data-section-id=\"15bd9l8\" data-start=\"6811\" data-end=\"6830\">Navigate cycles<\/li>\n<li data-section-id=\"1exooxn\" data-start=\"6831\" data-end=\"6853\">Reduce timing risk<\/li>\n<li data-section-id=\"3nuvhe\" data-start=\"6854\" data-end=\"6892\">Build wealth over extended periods<\/li>\n<\/ul>\n<p data-start=\"6894\" data-end=\"6976\">Short-term underperformance is often the price paid for long-term consistency.<\/p>\n<blockquote data-start=\"6978\" data-end=\"7088\">\n<p data-start=\"6980\" data-end=\"7088\">\u201cThe real advantage of SIPs becomes visible after volatility phases, not during them,\u201d said a market expert.<\/p>\n<\/blockquote>\n<h2 data-section-id=\"ksinyf\" data-start=\"7095\" data-end=\"7157\">What Lies Ahead: A Potential Inflection Point for Returns<\/h2>\n<p data-start=\"7159\" data-end=\"7316\">As macro conditions stabilise\u2014through easing interest rates, improved earnings visibility, or global clarity\u2014SIP returns are likely to rebound sharply.<\/p>\n<p data-start=\"7318\" data-end=\"7341\">When markets recover:<\/p>\n<ul data-start=\"7343\" data-end=\"7489\">\n<li data-section-id=\"ukestm\" data-start=\"7343\" data-end=\"7404\">Accumulated units at lower prices generate higher returns<\/li>\n<li data-section-id=\"ukhi99\" data-start=\"7405\" data-end=\"7439\">Portfolio recovery accelerates<\/li>\n<li data-section-id=\"rzs1ao\" data-start=\"7440\" data-end=\"7489\">The gap with category averages closes quickly<\/li>\n<\/ul>\n<p data-start=\"7491\" data-end=\"7587\">This creates a powerful effect where past underperformance turns into future outperformance.<\/p>\n<h2 data-section-id=\"z9jine\" data-start=\"7594\" data-end=\"7678\">Bottom Line: Short-Term Underperformance, Long-Term Wealth Creation in Progress<\/h2>\n<p data-start=\"7680\" data-end=\"7836\">The current gap between SIP returns and category averages is real\u2014but temporary. It reflects market conditions, not a flaw in the investment approach.<\/p>\n<p data-start=\"7838\" data-end=\"8024\">For disciplined investors, this phase represents a rare combination of lower prices and continued investing, which has historically been the foundation of strong long-term returns.<\/p>\n<p data-start=\"8026\" data-end=\"8161\" data-is-last-node=\"\" data-is-only-node=\"\">In investing, the phases that test patience are often the ones that build wealth\u2014and SIP investors are in exactly that phase today.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>SIP Returns Slip Behind Category Averages as Market Correction Resets Return Expectations India\u2019s retail investing engine\u2014Systematic Investment Plans (SIPs)\u2014is currently navigating a phase of visible underperformance, with returns trailing category averages across large-, mid-, and small-cap funds. The latest March data highlights the extent of this divergence. Large-cap SIPs delivered -12.43% over one year, compared [&hellip;]<\/p>\n","protected":false},"author":4,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-23356","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/23356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=23356"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/23356\/revisions"}],"predecessor-version":[{"id":23361,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/23356\/revisions\/23361"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/23358"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=23356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=23356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=23356"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=23356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}