30-Year Study Finds SIPs Outperformed Lump-Sum Investing in Six of 10 Equity Markets

Key Takeaways

• DSP Mutual Fund's 30-year study found higher estimated SIP returns in six of 10 major equity markets examined.
• India's Nifty 500 generated an estimated 13.3% SIP IRR compared with a 13.0% lump-sum CAGR.
• Results differed substantially by country, showing that neither investment method led across every market.

Systematic investments generated higher estimated annualised returns than lump-sum investing in six of 10 major equity markets over a 30-year comparison conducted by DSP Mutual Fund.

The study compared estimated lump-sum compound annual growth rates with SIP internal rates of return across major equity indices, using total returns measured in each market's local currency.

India showed only a narrow gap. The Nifty 500 generated an estimated SIP IRR of 13.3%, compared with a lump-sum CAGR of 13.0%, a difference of 0.3 percentage points.

Japan recorded the widest advantage for the SIP approach in the dataset. The Nikkei 225 produced an estimated SIP IRR of 9.9%, compared with a lump-sum CAGR of 5.5%. South Korea's KOSPI produced 10.8% through the SIP calculation against 8.9% for lump-sum investing, while the S&P 500 figures were 11.0% and 10.2%, respectively.

Canada and the UK also showed a modest SIP advantage.

The pattern reversed in four markets. Brazil's Ibovespa delivered an estimated lump-sum CAGR of 16.4%, compared with a 14.8% SIP IRR. China showed 7.1% for lump sum against 5.8% for SIPs, while France and Australia also favoured the lump-sum calculation in the study.

The dataset therefore does not establish one investment method as universally superior. Outcomes depend on the path taken by markets during the investment period because SIPs spread purchases across multiple price levels, while a lump-sum investment puts the full capital to work from the beginning.

The figures are historical estimates rather than forecasts. The study also uses different annualised return measures appropriate to the respective cash-flow structures—CAGR for a single lump-sum investment and IRR for recurring SIP cash flows. Past market results do not indicate future mutual fund returns.