Bengaluru, Sep 04: Share.Market by PhonePe released the CRISP Mutual Fund Scorecard for the quarter ending June 2026. The latest report highlights the critical role of patience in mutual fund investing, proving that early underperformance should not deter investors. Notably, the data for the last 20 years reveals that 7 in 10 five-year Systematic Investment Plans (SIPs) deliver double-digit annualized returns whenever markets have seen weak or negative returns during the first two years.
Analyzing two decades of data ending June 2026, the report reassures investors that the short-term SIP sluggishness experienced recently is not uncommon, and that extending the investment horizon can drastically improve outcomes.
The Resilience of Long-Term SIPs
- Short-term dips are common: Over the past 20 years, two-year annualized SIP returns in the Nifty 500 TRI have fallen below 5% on more than 25% of occasions.
- Recovering from negative starts: If an investor’s SIP generated negative returns in the initial two years, continuing for a total of five years reduced the likelihood of losing money to zero. In ~69% of these cases, the 5-year annualized return rebounded into double digits.
- Sluggish starts turn profitable: Investors who saw marginal 0% to 5% returns early on, always ended up with annualised returns of above 5% if they continued their SIP for five years. In nearly 72% of these scenarios, returns jumped into double digits.
- The decade advantage: Anyone who had done an SIP in the market for seven or 10 years historically reduced capital loss risk to absolute zero. Over a 10-year period, SIPs delivered double-digit returns roughly 90% of the time.
Nilesh D Naik, Head of Mutual Funds at PhonePe, said,
“With recent market cycles, it is natural for investors to worry about short-term sluggishness in their mutual fund SIPs. However, our study of SIP performance over the past two decades reinforces that the early years of a SIP do not dictate its final outcome. By extending their investment horizon, investors allow the true power of compounding to take over. Furthermore, by evaluating funds on our CRISP parameters of Consistency, Risk, and Investment Style, we believe investors can build resilient portfolios that deliver reliable, long-term success.”
Additionally, the quarterly scorecard also evaluates funds across various fund categories on performance consistency and volatility management revealing that –
- Category Leaders: HDFC, ICICI, Kotak, and Nippon boast the highest number of schemes with High-Performance Consistency among their peers while successfully avoiding outlier volatility.
- Style Trends: Funds high on Momentum and Value styles continue to dominate in performance consistency, while those high on Quality have lagged.
- Execution Over Style: Simply adopting a winning style did not guarantee consistency. While many funds had a Momentum or value style bias, their success has been mixed.
- Diversification Success: While there are quite a few AMCs that have been diversifying across more than one investment styles, only Kotak has had fair share of success with seven funds with High performance consistency while two have shown Medium consistency.