What Is the Real SIP Return After 10 Years? The Truth Long-Term Investors Should Know
- SIP inflows and participation are at all-time highs in India.
- 10-year average SIP returns (XIRR) are consistently between 12-15% for equity funds.
- SIPs help investors weather volatility and create wealth through discipline.
- Realistic return expectations and long-term commitment are crucial.
In recent years, SIPs (Systematic Investment Plans) have gained immense popularity among Indian investors seeking long-term wealth creation. But how have SIPs actually performed over a decade? If you're wondering what the average SIP return in 10 years really looks like, and whether it's enough to meet your financial goals, this blog breaks down the numbers and what they mean for your future.
SIP Trends: Participation and Inflows Are Soaring
SIP adoption has accelerated sharply in recent years. According to AMFI data:
|
Financial Year |
New SIPs Registered (lakhs) |
Outstanding SIP Accounts (lakhs) |
SIP Contribution (Rs. crores) |
SIP AUM (Rs. crores) |
|
Apr 21 – Mar 22 |
266.36 |
527.73 |
1,24,566 |
5,76,358 |
|
Apr 22 – Mar 23 |
251.41 |
635.99 |
1,55,972 |
6,83,296 |
|
Apr 23 – Mar 24 |
428.09 |
839.71 |
1,99,219 |
10,71,666 |
|
Apr 24 – May 24 |
113.39 (2 months only) |
875.89 |
41,275 |
11,52,801 |
SIP accounts and assets under management have nearly doubled in three years. Even more impressively, monthly inflows have hit record highs.
Monthly SIP Inflows: Record Growth
|
Month |
SIP Inflows (Rs. crores) |
|
June 2023 |
14,734 |
|
December 2023 |
17,610 |
|
April 2024 |
20,371 |
|
May 2024 |
20,904 (highest ever) |
Clearly, Indian investors are embracing SIPs like never before.
What Is the Average SIP Return in 10 Years?
Let’s now evaluate what kind of returns long-term SIP investors have actually experienced.
Example: Large-Cap Mutual Fund (as of April 30, 2024)
|
Investment Tenure |
Total Investment (Rs.) |
Market Value (Rs.) |
XIRR Return |
|
1 Year |
1,20,000 |
1,33,857 |
22.17% |
|
3 Years |
3,60,000 |
4,44,730 |
14.42% |
|
5 Years |
6,00,000 |
9,03,640 |
16.41% |
|
7 Years |
8,40,000 |
14,12,188 |
14.59% |
|
10 Years |
12,00,000 |
25,26,794 |
14.25% |
Over 10 years, the XIRR return of 14.25% more than doubled the investor’s total contribution. Similar or better returns were observed in select mid-cap and small-cap funds.
Pro Tip
A 10-year SIP return of 12–15% (XIRR) is considered excellent and above inflation.
Why Long-Term SIP Investing Works
Over the decade (2014–2024), the market faced significant headwinds:
-
Demonetisation
-
COVID-19 crash
-
Ukraine-Russia conflict
-
Global recession fears
-
Election uncertainty
Despite all this, equity markets not only recovered but surged past their previous highs. SIPs worked because of:
-
Rupee Cost Averaging: More units are bought when markets dip.
-
Compounding: Gains reinvested over long periods accelerate growth.
-
Discipline: Automating investments prevents emotional decisions.
Aligning SIPs with Financial Goals
The real power of SIPs lies in planning. Align your SIPs to:
-
Short-term goals (<3 years): Use low-risk debt SIPs.
-
Medium-term goals (3–5 years): Consider hybrid or balanced SIPs.
-
Long-term goals (5+ years): Choose equity SIPs for wealth creation.
Consider using a SIP calculator to estimate how much you need to invest monthly for each goal. The longer your horizon, the better SIPs perform.
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