Daybreak Are SIPs always right? Nah, says a new study
7 snips
Feb 15, 2026 A study challenges the popular belief that systematic investment plans are always the safe choice. The episode discusses research showing SIPs can raise shortfall risk and sometimes underperform lump-sum investing. It explores why SIPs remain popular for behavioral reasons and warns about rising small-cap SIP exposure and marketing-created expectation gaps.
AI Snips
Chapters
Transcript
Episode notes
Industry Voice Against SIP Hype
- A mutual fund executive told Rachel Varghese that "SIPs are a problem," which surprised her given industry messaging.
- Sanjeev Prasad also criticised SIP hype, noting 40% of retail inflows since 2021 yielded zero returns.
Research Challenges SIP Orthodoxy
- Rajan Raju's paper asks "Are SIPs really sahi?" and analyses 20 years of Indian index data.
- It argues that the common SIP message oversimplifies trade-offs and creates unrealistic expectations.
SIPs Can Lose Money More Often Than You Think
- The paper finds SIPs can carry a non-trivial probability of shortfall, sometimes higher than lump-sum investing.
- When SIP losses occur, average shortfalls often exceed 10% of invested capital.