Investors Who Started at Market Peak Face Uphill Task with Rs 10,000 SIPs Across Large, Small, and Mid Cap Funds
Market Volatility Tests Investor Strategies
Investors who put in money every month in a disciplined manner have faced a tough journey since the market peak in late September 2024. The Sensex, the benchmark index of the Indian stock market, hit an all-time high on September 26, 2024, and has been volatile and largely subdued since then. The Sensex is down about 9.4 percent so far this year and over 4 percent in the past one year.
Comparing SIPs and Lumpsum Investments
To understand the impact of this volatility on investors, we analyzed the performance of a Rs 10,000 monthly Systematic Investment Plan (SIP) and a one-time Rs 2 lakh investment made at the same time. We compared the performance of large-cap, mid-cap, and small-cap funds.
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| Category | SIP Return | Lumpsum Return |
|---|---|---|
| Large-Cap | -2% | -4% |
| Mid-Cap | 17% | 5.4% |
| Small-Cap | 13.4% | 2% |
Large-Cap Funds: SIPs Held Up, but Don't Expect Big Returns
If you had started a Rs 10,000 monthly SIP in large-cap funds right at the market peak in September 2024, the outcome would've been decent, but not exciting. The best-performing fund, Bank of India Large Cap Fund, delivered an XIRR of about 4.4 percent, taking your Rs 2 lakh investment to just over Rs 2.07 lakh. Several funds barely stayed above water, and many slipped into negative territory.
Mid-Cap Funds: Bigger Risks, but Also Much Bigger Rewards
Investors who started a Rs 10,000 monthly SIP at the peak still managed to earn strong double-digit returns in some cases. ICICI Prudential Midcap Fund, for instance, delivered an XIRR of nearly 17 percent, turning a Rs 2 lakh investment into over Rs 2.27 lakh. Mid-caps rewarded investors, but only if the right funds were picked.
Small-Cap Funds: High Returns, but Only if You Got it Right
Investors who started a SIP at the market peak still saw strong gains in the top-performing funds. Union Small Cap Fund, for instance, delivered an XIRR of about 13.4 percent, while several others generated returns in the 9-10 percent range. But the downside is hard to ignore.
Conclusion
Investing at the market peak tested every strategy, but not equally. SIPs helped smooth the journey across categories, limiting losses and even delivering gains in several mid- and small-cap funds. Lumpsum investments, on the other hand, were far more sensitive to timing, with losses showing up across most categories. The gap between the best and worst funds widens sharply as you move from large-caps to small-caps.
Investor Takeaway
Investors who started at market peak with Rs 10,000 SIPs across large, small, and mid-cap funds may face an uphill task.
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