SIP sahi hai! Mutual fund investors win big with 97% success rate in treacherous 2025
Indian markets faced a tough year in 2025, becoming the world's worst performers. However, investors using Systematic Investment Plans (SIPs) saw remarkable success. A staggering 97% of mutual fund schemes delivered positive returns, with some achieving XIRR up to 37%. This demonstrates the power of disciplined, regular investing over market timing. SIPs helped investors navigate volatility and achieve wealth creation.
While momentum-chasing retail traders nurse losses from a disastrous year that saw Indian markets become the world's worst performers, systematic investment plan (SIP) investors are quietly celebrating as a staggering 97% of mutual fund schemes have delivered positive returns in 2025 with their XIRR going up to 37%.
Out of 490 active domestic equity mutual fund schemes open for monthly SIPs on January 1, 2025, just 13 ended the year with losses even as Nifty’s 9% annual gain masked widespread weakness across small- and mid-cap stocks.
Turning a year of market misery into a triumph for disciplined and systematic investing, Quant BFSI Fund topped the charts with 37% XIRR, followed by SBI Automotive Opportunities Fund at 33% and Bandhan Transportation and Logistics Fund at 31%.
Banking, financial services, and transportation-logistics funds dominated the leader board, with at least 28 schemes delivering returns above 20% XIRR. ICICI Prudential Midcap Fund returned 22%, while focused funds from SBI, ICICI Pru, and Kotak all posted returns above 21%.
The data looks even more interesting when you look at smallcaps, which has been undoubtedly the worst performer whether you are a direct stock picker or MF investor. In the last one year, Nifty Smallcap250 has lost 6% of its value but SIP investors have made double-digit gains.
An SIP in Mirae Asset Small Cap Fund has given XIRR of 18% this year, TRUST Smallcap Fund 16%. Besides a host of other smallcap funds run by Quantum, Mahindra Manulife, Sundaram, DSP, Union and Invesco have given double-digit returns. Only 2 funds have given negative returns.
“This shows that systematic investing works well in volatile markets and active funds not only have the ability to protect downside but also generate alpha with active stock selection. SIPs help investors overcome behavioural biases like timing the market and shying away from investing in volatile markets. Thus, by not missing out on the best days in the market, SIP investors benefit by simply staying invested and lower their unit acquisition cost in volatile markets,” Abhishek Tiwari, CEO of PGIM India Asset Management told ET.
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Investing in direct equity can be fraught with risk, especially for first-time investors. Mutual funds offer a better risk-adjusted outcome due to the stock selection process and weeding out companies which may not have superior fundamentals.