Small-Cap SIPs Deliver 14.25% Average Return Over Two Years as Most Categories Beat Benchmarks

Key Takeaways

• Small-cap mutual fund SIPs recorded an average return of 14.25% over the two-year period covered by the study. 
• Mid-cap and multi-asset allocation fund SIPs generated average returns of 8.51% and 7.85%, respectively. 
• Most of the major mutual fund categories covered in the analysis delivered SIP returns above their respective benchmark indices. 

Systematic investment plans across several mutual fund categories have delivered positive returns over the past two years despite periods of weak momentum in the broader equity market, according to an analysis published by ETMutualFunds on September 29. 

Small-cap funds recorded the highest average SIP return among the major categories covered, at 14.25% over the two-year period. 

Mid-cap fund SIPs delivered an average return of 8.51%, while the multi-asset allocation category generated an average of 7.85%. The study found that most of the mutual fund categories examined had outperformed their corresponding benchmark indices on the SIP-return measure. 

The findings are based on periodic investments rather than lump-sum returns. SIP performance is typically calculated using XIRR because investments are made at multiple points in time and therefore cannot be directly compared with a simple point-to-point return. 

SIP Contributions Continue to Rise 

The performance data comes alongside continued expansion in India's SIP market. 

Monthly SIP contributions reached ₹32,297 crore in August 2026, while the number of active SIP accounts stood at 10.02 crore. 

The increase in recurring investments has continued even as different segments of the equity market have produced uneven returns. 

Small-cap and mid-cap funds, in particular, remain more sensitive to market volatility than diversified large-cap-oriented categories. The two-year numbers consequently represent historical performance over a specific period rather than an indication of future returns. 

The latest study nevertheless provides a snapshot of how regular investments across major mutual fund categories performed during a period in which benchmark returns and market momentum varied substantially.