Study: Staying in One SIP Beats Chasing Last Year's
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- WhiteOak Capital Asset Management compared two SIP approaches: switching every financial year to the previous year's best-performing market-cap category versus remaining in one fund.
- Nifty Midcap 150 TRI SIPs started in FY2006 delivered 17.05% XIRR for investors who stayed put versus 14.76% for those who switched annually, as of 31 May 2026.
- 10-year rolling SIP returns for mid-caps averaged 17.55% (stay invested) against 15.75% (switching), based on data spanning 1 April 2005 to 31 May 2026.
- Nifty Smallcap 250 TRI produced the opposite result: switching earned 14.75% XIRR versus 14.63% for staying invested, with 10-year rolling returns of 15.75% versus 14.91%.
- The small-cap switching advantage was marginal, and the study noted that market leadership changes frequently, meaning investors often buy in after a segment's rally peaks.
- WhiteOak concluded that consistency and compounding discipline outperform chasing recent winners, especially given SIP investors' long-term horizons.
Why it matters: For the millions of Indian retail investors running SIPs, the study suggests that the common urge to chase last year's category winner costs real money — over 2 percentage points of annual XIRR in mid-caps, which compounds into a substantial corpus gap over a decade. The small-cap flip is narrow enough (~0.12 points on lifetime XIRR) that staying put is the sturdier default for most investors.
