Mid-cap Play: SIPs of 8+ years gave profits, show past data
Systematic Investment Plans (SIPs) and do not want to risk losing capital might need a minimum time frame of eight years, if past data are to go by. A study by asset valuation analytics firm Valuemetrics Technologies on monthly rolling returns for SIPs between April 2005 and March 2025 in the Nifty Midcap 150 Total Returns Index showed such investments made for three and five years have incurred losses (see table).
SIPs made in this index for 8 to 15 years in this time frame have made money. In comparison, for an investor to be sure that her small cap index SIP investments did not lose money in this period, she had to continue for at least 12 years.
Historically, returns from midcaps have tended to be lower compared with small-cap, but the risks of investing in this segment have also been lower.
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For instance, the highest return made in a three-year SIP in the Nifty Midcap 150 TRI in these 20 years was 37.5% on an annualised basis, lower than 42.1% in Nifty Small Cap 250 Total Returns Index.
The value of three-year SIPs in the mid-cap index eroded by as much as 63% in the worst-case scenario in this period, while for small caps it is slightly higher at 64.7%, the study showed.
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Investors lost 8.2% on an annualised basis in a 5-year SIP in the mid-cap index, but if the SIP continued for a tenure of eight years, the minimum return increased to 1.7%. Investors who continued doing SIPs in Nifty Midcap
