The Start-Date Lottery: Why the Same SIP Can End Very Differently

Imagine two colleagues in Bengaluru. Both start a ₹10,000 monthly SIP in the same index fund and both invest for five years. Their funds are identical. One finishes with a return of about 8% a year, and the other with about 16%.

The difference is the calendar. One started in 2012, the other in 2017. Neither did anything smarter than the other. This article shows how big that gap can be using ten real windows of Nifty data, then explains the less obvious point: for a SIP investor, the dangerous part of the calendar is the end, not the beginning.

Ten five-year windows, one index

We took the Nifty 50’s calendar-year price changes for 2012 to 2025, from a published table, and ran a ₹10,000 monthly SIP through each five-year window that starts in January of a given year. The results are XIRRs, the annualised return that accounts for the timing of each instalment. If the term is new, our guide to CAGR vs XIRR explains it.

Illustration built from year-by-year price changes of the Nifty 50. It assumes growth is even within each year, excludes dividends and costs, and describes an index, not any fund. Real monthly paths and real funds will give different figures.

The spread runs from 7.9% to 16.2% with a median near 12.7%. Same index, same SIP amount, same duration, a gap of 8 percentage points based on the start year alone.

Two cautions apply. First, this is one 14-year stretch, and it contains no crash as deep as 2008-09, when the Nifty 50 Total Returns Index fell about 35% in the financial year (table). Second, indices are the gentle case. Outlook Money notes that mid and small-cap SIPs started between September 2014 and August 2019 likely ended with negative returns over those five years (article).

Same returns, different order

The start year decides which returns you get. A second test removes that factor and keeps the returns identical. We took ten yearly returns that compound to exactly 12% a year and changed only the order. Each run is a ₹10,000 monthly SIP for ten years, with ₹12 lakh invested.

Illustration with assumed returns. Not a forecast.

A lump sum put through those three orders would have ended in the same place each time. A SIP does not, because your later instalments have less time to grow and your corpus is largest at the end.

Where the risk sits

Most people expect a bad market at the start of a SIP to be the worst case. The numbers say the opposite. When the two negative years came first, the SIP finished highest. Early falls shrink a small corpus and let you buy units cheaply for years afterward. A fall at the end hits a large corpus with no time left to recover.

This changes how you should think about timing. You cannot choose your start year, and trying to wait for a good one has its own cost. But you can see your end date, and that is where the risk concentrates. Some practical points follow.

Know your goal date from day one. A SIP with no end date has no risk plan. A SIP with a date can have a staged exit.

Plan a runway for the last three years. Many investors move part of a goal fund into lower-risk options as the date approaches, so a late fall hurts less. The exact steps depend on the goal and your comfort, and they deserve a conversation.

Keep investing through the middle. The path to the finish line includes years that will feel bad. Our down-year checklist covers how to decide whether to continue.

Add a step-up. A rising SIP puts more money to work in the years when your corpus is still building, which makes the plan less dependent on any one year.

Three short scenarios

These people are made up, and their situations are common.

Arjun and Sneha. Arjun started his SIP in January 2012 and Sneha in January 2017. At the five-year mark, Arjun’s XIRR is 7.9% and Sneha’s is 16.2%. Arjun feels he picked badly. He did not pick differently, he started earlier. Over a longer period, his later years in the same SIP may change the picture, and his corpus has had more time to grow. Comparing results across start dates tells you about the calendar more than the person.

Kavita and a goal in 2030. Kavita needs money for her child’s university fees in 2030. She has a fixed date. Her main question is not whether equity beats debt in general, but what happens to her corpus if 2029 is a bad year. A staged shift to lower-risk funds across 2027 to 2029 is one way families handle this.

Prashanth, 27, no fixed date. His goal is retirement, 30 years away. A fall at year 29 matters, but a fall at year 5 matters much less. His plan can accept more ups and downs now and become more careful over time.

What a planner can and cannot do

A plan cannot choose your start date or predict your end date’s market. It can tell you when the exposure is highest, set a rule for reducing it, and keep you from reacting at the wrong moment. Artha Vridhi’s SIP planning includes a goal-date glide plan, where we map your final three years before you need the money, so the rule exists before the market tests it.

When this advice matters less

If your goal is flexible, for example retirement with the option to work two more years, a late fall is less severe because you have a way to wait. If your SIP is small compared with your savings and you do not depend on it, the order of returns changes less in your life.

Frequently asked questions

Does my SIP start date matter?

It affects your result, as the ten windows show. But you cannot predict the best start date, and most investors do better by starting and continuing than by waiting.

Is a bad market at the start of a SIP harmful?

It feels harmful, but a SIP buys more units when prices are low. In our illustration, early negative years produced the highest final value. That depends on the market recovering, which is not guaranteed.

When should I start moving money from equity to debt for a goal?

There is no single rule. Many investors begin about three years before the goal. The right schedule depends on the size of the goal and what a late fall would do to your plan.

Does a longer SIP remove the start-date effect?

It reduces it. Over longer periods, differences between start dates shrink in most historical data, though they do not disappear. Capitalmind’s study of 15-year SIPs still found a wide range of outcomes (The 12% Myth).

Can you help me map a glide plan for my goal?

Send us your goal and date on WhatsApp.

Disclosures

Mutual fund investments are subject to market risks, read all scheme-related documents carefully.

Artha Vridhi is an AMFI-registered Mutual Fund Distributor (ARN-362803). This article is for education and is not personal investment advice. Index figures come from third-party sources cited above and should be verified against NSE Indices data. Illustrations use assumed numbers and are not forecasts or promises of return. Distributors are paid commission by fund houses on regular-plan investments.