DSP Mutual Fund: Why ₹87 Lakh SIP Math Misleads Investors — SkimNews
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- DSP Mutual Fund calculated that a ₹10,000 monthly SIP in the Nifty 50 TRI from September 2006 to August 2026 would mean ₹24 lakh invested over 240 instalments, growing to ~₹87.3 lakh — but noted ₹10,000 equalled ~55% of per-capita Net National Income today versus over 350% twenty years ago.
- DSP showed that if the SIP had scaled with income — starting at ~₹1,536 and rising to ₹10,000 — total investment would have been ~₹12.2 lakh for a corpus of ~₹31.9 lakh, not the headline ₹87.3 lakh figure.
- DSP found that pausing SIPs around the Global Financial Crisis would have cut the eventual corpus from ₹87.3 lakh to ~₹77 lakh, with deeper hits from withdrawals.
- A 50% withdrawal around major market events would have brought the corpus down to ~₹75.7 lakh during the GFC trough, ~₹61.8 lakh during the Taper Tantrum, and ~₹49 lakh during COVID, per DSP.
- DSP's 30-year Sensex study found 99% of 10-year SIPs outperformed debt with a ~14.2% median return, yet 81% had negative returns at some point, 97% trailed debt at some point, and the median SIP lagged debt for ~16 months.
- DSP noted ~95% of SIPs hit a rough patch in their first five years and 60% faced another between years six and 10, arguing the headline lesson is to pick a survivable contribution and raise it with income.
Why it matters: DSP reframes SIP planning around sustainability rather than headline wealth. With ~95% of SIPs hitting a rough patch in the first five years and ₹10,000 once equating to over 350% of per-capita income, investors chasing the ₹87 lakh illustration risk picking an unaffordable starting amount that gets abandoned when life intervenes — undoing the compounding the number was meant to showcase.
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