How SIP has been the strong hero across historical market cycles

Kotak Mahindra AMC

Markets have taken a sharp downturn, sparking fear and uncertainty among investors. The sentiment has shifted from euphoria to caution, with many questioning whether to stay invested or wait for further declines. Historically, such corrections have been moments of panic for some—but golden opportunities for those who remain disciplined.

Data as on 28thFeb’25. Source: ICRA MFI. PRI Values have been used for the computation

The above data demonstrates whether an investor invests from the top or bottom of the crisis, there is no material difference in the returns. Longer investment periods allow markets to complete their cycles of downturn and recovery, leading to normalization of returns that diminishes the initial impact of the crisis entry point.

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Market downturns cause short-term disruptions. However, investors who stayed invested in SIPs saw substantial growth in recoveries.

Why should we continue with SIP in falling markets?

1. Crises Create Buying Opportunities

— SIPs let you buy more units when markets fall, lowering your average cost. This effect i.e. rupee-cost averaging—ensures higher returns when markets recover.

— SIP returns across all indices rebounded strongly post-crisis, reinforcing incremental benefits by staying invested.

2. Small & Midcaps Deliver Higher Returns, but with Increased Volatility

— The Nifty Midcap 100 and Nifty Smallcap 100 consistently outperformed the Nifty 50 in terms of long-term returns
— However, these segments also exhibited higher