Best Date and Frequency For SIP: Can SIP date and daily, monthly or weekly frequency impact your returns from mutual fund investment? | The Financial Express

Can SIP date and daily, monthly or weekly frequency impact your returns from mutual fund investment?

The ideal SIP date would be when the investor usually receives money in his/her bank account like the salary credit day.

Can SIP date and daily, monthly or weekly frequency impact your returns from mutual fund investment?
Any day is a good day for SIP if you plan to invest for the long term.

Is there a good date to start a monthly SIP? With Systematic Investment Plan (SIP) becoming one of the most popular ways of investing in mutual funds, investors are often confused about the best date to start their investment journey.

A study conducted by WhiteOak Capital Mutual Fund has found that there is no such thing as the best date to start SIP. The ideal SIP date, however, would be when the investor usually receives money in his/her bank account like the salary credit day.

“Start of the Month? End of the Month? Middle of the Month? Near the Last Thursday of the month because of higher volatility due to F&O expiry? Splitting SIP amount into multiple date SIPs? We tried answering these commonly asked questions using long-period data from S&P BSE Sensex TRI (a widely tracked Indian Equity Market Index). The study of the last 26 years’ index data reveals no meaningful difference between the average return of different dates’ 10 Years SIPs,” the report said.

Source: WhiteOak Capital

Also Read: Large Cap, Mid Cap or Small Cap SIP – Which is best for long-term growth?

Should you do daily, weekly or monthly SIP?

The study also analysed historical mutual fund returns data to find that the frequency of SIP doesn’t make much difference. What matters the most is starting a SIP early and running it for the long term than what frequency one selects.

“A historical data analysis provided below suggests that, in the long term, it hardly matters if the investor invests via Daily, Weekly, or Monthly SIP Frequency. All three frequencies end up generating somewhat similar returns (% XIRR),” the report said.

Source: WhiteOak Capital

The study found that investments of Rs 64.7 lakh through daily, weekly or monthly SIP between September 1996 and September 2022 had similar returns of around Rs 5.0 crore at an average of 14.3% XIRR.

Also Read: 20 years of ICICI Prudential Multi-Asset Mutual Fund: Rs 10 lakh turns into Rs 4.6 crore since inception

In the second quarter of FY23, investors made a contribution of around Rs 13,000 crore. The SIP accounted for 16.5% of total industry assets as against 15.5% in the previous quarter.

(Disclaimer: Mutual fund investments are subject to market risks. Please consult your financial advisor before investing)

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First published on: 04-11-2022 at 17:45 IST