Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Charts & Analysis

Chart Of The Day: Nifty 5 year SIP Returns

Yesterday’s Chart Of The Day showed the Rolling Nifty Return over five years, and in response readers have requested that I check what it means to have done an SIP instead – a fixed amount invested every month. Here we go:

Nifty SIP Rolling Returns

The average return is 13.11%. We are currently at 8.87% versus the 7.09% that we saw with a pure lumpsum approach. This is quite a lot better, since over a long term even a marginal percentage difference makes a lot of money.

The next request was that I consider dividends as well. So I’ve plotted all three – the Lumpsum, SIP and SIP with dividends reinvested option.

SIP with Dividends

 

I’ve considered data only till September end. Dividends considered using Nifty Total Returns Index, where data is only available since 1999. Dividends in the early part of the last decade were higher than later, it seems.

SIP with Dividends: most recent five year return is 9.94%.

  • Anon says:

    Cool…thanks for responding to my wish-request so quickly!

  • piyush modi says:

    I noticed an interesting bit in my charts today. DLF has actually moved up above its 200 dma over the last 3-4 sessions. And this is when Nifty is actually 10% away from its. In a way, DLF has been outperforming Nifty for some time now. Not just in this uptrend, but over the past several months. Its a strange phenomenon in an economic environment not conducive to real estate fundamentals. Interesting.
    If market breaks out past 5170, DLF would be first stock I’m going to pick up.

  • Dev says:

    I have done an analysis of returns based on PE of Indian markets. The calculations have been done considering a person invest continuously by SIP. But there is a rider. Person has to invest more when PE is less than a critical value and vice versa.
    Post can be found at
    http://essentialassociate.wordpress.com/2011/01/27/dont-try-to-cheat-the-pe-ratio/

  • Tony says:

    Dear Deepak,
    Does this SIP return is based on how much of the lumpsum would have been invested starting from the 10-year-ago date. Roughly, the SIP’s have been invested for only a smaller period given that the recent ones were invested for less than a year and the first one has been there for 10 years. Does you calculation takes that into account?