Don't Step Into The Equity SIP Illusion

SIPS are a powerful tool for wealth creation, but only if you do not give in to illusions such as SIPS always give double-digit returns

- Avneet Kaur

Credit it to the Mutual Funds Sahi Hai campaign or the rising equity culture in India, mutual fund systematic investment plans (SIPs) are continuously breaking the popularity charts in the Indian investment landscape.

The numbers prove it. Data from the Association of Mutual Funds In India (Amfi), as of November 2025, shows that there are more than 80 million SIP accounts in India and the total assets under management (AUM) for SIPs has climbed to ₹16.52 lakh crore, more than half of all assets held by equity-oriented mutual funds. Equity-oriented schemes themselves command a massive ₹35.65 lakh crore in AUM.

The narrative in investor seminars and even YouTube explainers has helped build that credibility: SIPs bring discipline as they are automated and effortless, they protect you from volatility, and the equity variants ensure inflation-beating returns, and they are capable of turning even the most inconsistent saver into a long-term wealth creator.

But are SIPs really the miracle pill for wealth creation? The truth is more complicated which is often not a part of the popular narrative. That SIPs always deliver tidy, double-digit returns is an illusion that people often fall for. They don't.

For instance, anyone investing in mid- and small-cap funds by way of SIPs between September 2014 and August 2019, a five-year stretch, likely ended up with negative returns. Even the Nifty 50 SIPs during the same period delivered only about 7.10 per cent, according to data from Accord Fintech.

That's not to say that SIPs don’t work for you or are flawed. But SIPs are true to their potential only when the investor works with them. Here are some factors that can act like drawdowns, and how investors can navigate around them.

The 12% Return Illusion