A lot of people I know invest through SIPs.
Some are friends. Some are former colleagues. Some are people I have met during some sessions or workshops. They all say the same thing. That they have set up a few SIPs, and it feels like they are doing something good with their money.
I am no exception, to be honest. I also have a few SIPs that are scheduled for every month. The money gets deducted automatically and I do not have to think. It feels like a responsible habit.
And there are many like us.
According to AMFI, India sees over ₹25,000 crore in SIP inflows every single month (As of June 2025). There are more than 8 crore active SIP accounts. The SIP culture has grown rapidly in the last few years.
Some of it started after 2017, when the mutual fund awareness campaign “Mutual Funds Sahi Hai” really picked up. A lot of young professionals entered the market through SIPs. Even now, for many first-time investors, SIP feels like the default step.
And honestly, that is not a bad thing. SIP is a good habit. It brings discipline. It reduces the urge to time the market. It allows people to get started with small amounts. For someone in their 20s or 30s, having a portion of their salary go into a SIP is better than doing nothing.
But this belief that SIP alone can create wealth, no matter what you invest in, is where the problem begins.
Around two years ago, a friend messaged me. He had been doing SIPs in two mutual funds for nearly three years and wanted my view. He was not in a rush, just curious about how things were going. We opened the portfolio and started going through the numbers.
One of the funds stood out. It had been underperforming for almost the entire period. Not just slightly. It had lagged the category average, lagged the benchmark, and even a simple index fund would have done better.
He was actually surprised. He had assumed that just doing an SIP would take care of things. But this was a reminder that the quality of the fund matters just as much, if not more.
That is when I started thinking more seriously. About what we are told. About how so many of us feel safe just because a system is in place.
Someone with a finance background might still understand that SIP is only a tool. A means to an end. The actual performance depends on what mutual fund scheme you invest in, and that performance can vary. But if this kind of blanket messaging reaches the masses that SIP will always create wealth, no matter what, then it creates a wrong perception.
Because SIP is not a solution by itself. It is just a way of investing. And like any way, it works only if the underlying investment performs. If the fund or stock does not grow, the SIP does not help either.
So while SIP is a good habit, it is not a guarantee. And it is time we stop pretending that it is.
What should you actually do if your SIP feels like it is not working?
This is a situation that many investors face, but very few know how to navigate. The solution is not always to stop investing, nor is it to blindly continue. What is needed is a clear and balanced approach.
Here is how to think about it.
1. Begin with context, not panic
Start by checking the performance of the fund over the last three to five years. Avoid looking at only one number.
Consider how the fund has done relative to:
- Its benchmark index
- The average performance of other funds in the same category
- A broader index such as Nifty 50 or Sensex
If the fund has delivered 7 per cent per year while its peers and the index are closer to 12 or 13 per cent, then it is worth asking why. Performance that lags over a long period is a reason to review, not a reason to immediately exit.
2. Know what you are actually investing in
Many investors start SIPs in funds without knowing their structure. Some funds are diversified. Others are highly focused on specific sectors or themes.
For example, PSU or infrastructure funds. These may work well for a year or two but can stay flat for long periods.
There have been long phases when thematic funds underperformed broad-based equity funds. Between 2018 and 2020, many PSU-focused funds delivered close to zero returns, while even a simple index fund gave better results.
If your SIP is in a fund that is tied to a specific theme, ask whether that theme still has room to grow or whether the opportunity has already passed. I personally do not o SIP in heavily concentrated or focused themes as themes tend to be cyclical in nature.
3. Look beyond numbers
Try to check if anything significant has changed inside the fund. A change in fund manager, a shift in investment style, or a large inflow of assets can all affect the fund’s ability to deliver returns. These updates are usually shared in the fund factsheets or commentary.
Even if you are not tracking it regularly, a quick annual review can give you enough information to decide whether to continue.
4. Ask yourself a simple question
If you had no investments in this fund today, and were starting fresh, would you choose it again? If the answer is no, continuing just because the SIP is already set up may not be helpful.
You are not locked into any fund. Staying with a fund that no longer fits your goal or expectation is not discipline.
5. It is perfectly reasonable to ask for help
If you are not sure how to assess a fund or compare it with alternatives, it is completely fine to reach out to someone who understands this better. A financial advisor or a wealth professional can help you look at the full picture and not just the return chart.
Sometimes, what feels like underperformance may simply be part of a normal cycle. At other times, you may be invested in something that no longer makes sense. Having someone help you see the difference can be useful.
You are already putting in the money. It makes sense to put in a little thought as well.
Final thought
SIP is like that one friend who wakes up early, eats on time, avoids sugar, and walks 10,000 steps a day. Very disciplined. Very sincere.
But if that same friend starts following random advice without checking the source, then all that effort may not lead to great results.
That is what happens when SIP is treated like a guaranteed outcome. The habit is useful. But what you invest in still matters.
Every month, money goes out of your account. It feels like you are doing the right thing. But unless you check where that money is going, the whole exercise may be based on assumption, not awareness.
SIP is NOT a set-and-forget tool. It is a system that works well when paired with good choices.
So yes, continue your SIPs. Just open the app once in a while. Ask what the fund is actually doing. Think about whether it still fits your goals.
And if something feels off, it is okay to pause, ask, and adjust.
Sometimes, that one small check is what keeps the whole system working well.
Author Note
Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.
The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.
Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.