Best SIP Date for Mutual Fund Investment in India

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Which is the Best SIP Date for Mutual Fund Investment? Nowadays Mutual Fund Companies offer us various dates to do monthly investment in Mutual Funds. Hence, many get confused in choosing the right date for their investment. In this post let us try to find which is the best SIP date.

Few try to choose the SIP based on their salary credit and few look for the last Thursday of the month where the volatility is high due to F&O expiry. Few may also choose the SIP date based on their own research.

In my earlier post “Best Market Timer Vs Worst Market Timer Vs SIP Investor of Nifty – Who is the winner?“, I have done research on three investors. Mr.X is a person who invests every month on the date where the market is all time on that particular month. Mr.Y is a person who invests on the lowest value of the market date. Finally, Mr.A invests regularly on 5th of every month. You found that after running the test for almost 18 years data of Nifty 50 TRI, the final result is MARKET TIMING WILL NOT WORK in the long run.

After writing this post, a blog reader commented saying that I have to run the same test for various dates to know how the results look like.

Hence, I thought to write a post on this with valid numbers.

Best SIP Date for Mutual Fund Investment

For this, I have again considered the Nifty 50 TRI Index from 1st Jan 2003 to 31st October 2021 data. It is almost around 18 years of data with around 4,500 dates and respective Nifty 50 TRI Index values.

I considered the SIP dates like 1st, 5th, 10th, 15th, 20th, 25th, and 30th of each month. If during these dates market is not open, then the SIP will be considered for the immediate next available value.

The result can be viewed from the below image.

Best SIP Date for Mutual Fund Investment

As it is almost 18 years of data, the difference may not be visible much. However, if look into the final results in numbers, you may notice the actual results. For all these 7 dates, there are 226 months of SIPs. If we tabulate the same, the actual results are as below.

Best SIP Dates to invest in Mutual Funds in India

I have highlighted the lowest and highest XIRR returns. The difference is marginal and in fact negligible. By looking at all these data what we can conclude that your SIP date does not matter. What matters is your consistency in investing and holding for the long term.

One more thing you noticed from the above graph is that during the market crash, your values also dipped. Hence, SIP is just a way of investment systematically but not a sure way of protecting the risk during market fall. You have to protect your invested amount by proper asset allocation between debt to equity. The market will not treat your money specially just because you accumulated the money through SIP.

From my earlier post “Best Market Timer Vs Worst Market Timer Vs SIP Investor of Nifty – Who is the winner?” and this post, what we can conclude is the TIMING the market is the worst strategy. Instead, invest as and when you have money.

Never try to time the market with an intent to earn extra even with your monthly SIPs. It is a futile exercise in the end. However, there are few who may wisely select certain data points and show you the Best SIP Date for Mutual Fund Investment. However, if we change the data points, the results may vary again. Hence, I have taken the maximum available data points for Nifty 50 TRI Index to arrive at this conclusion.

The SIP concept is built on rupee-cost averaging. Hence, stick to this basic concept rather than trying to maximize the returns by choosing the particular dates or being in the wrong myth that SIP will protect your money during the downfall.

The “Best SIP Date for Mutual Fund Investment” as per me is the date when you receive your income. First, invest and with the rest of the amount spend without any guilt.

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20 Responses

  1. very nice article. thanks for the effort to conclude in the long term, day of the month does not matter, only consistency is relevant. Have you done any backtesting based on astro cycles for SIP. Thanks again.

  2. Which date to invest in SIP is talked about a lot. But the bottom line is never to time the market and keep investing whenever you have money to invest.
    One can have some savings to take the opportunity of big dips, but regular investing should not be sacrificed by just waiting for a correction.

  3. This is fine for 18 years. but try running your test on a rolling shorter window like 5years or 7 years and you will realize that Mr A makes lot more money than other two. I have back tested it on Index. In my assumption, I don’t have a perfect timer but even if you invest just a day after index has fallen 0.5%, XIRR is larger than picking one particular day of month. If you increase the threshold for the dip you will see even higher XIRRs.

    1. Dear Vikas,
      Obviously, if you consider the shorter tenure results tilt to one side. However, as we preach equity is for long term, I have considered the possible longest time horizon to arrive at this result.

  4. Hi Sir, Thanks for your a valuable article which is shows the reality of SIP date. I really liked your last quote mentioned in the article at last.

  5. Lovely articulation. I loved how you used data and insights and used it in storytelling form to convey β€œThe difference is marginal and in fact negligible. By looking at all these data what we can conclude that your SIP date does not matter. What matters is your consistency in investing and holding for the long term.”

    Thank you!

  6. That was nice. I can see this has taken a lot of efforts from u. I hoe it will benefit thousands more and influence their investment strategies. Thanks a lot.

  7. Hi Sir,
    I have just started with advisory or as IFA. Can you please suggest how to take it compete from existing distributors competition and app based investors.

    1. Dear Dilip,
      There is no shortcut. Try to be a learner every day and try to give your best to your clients without bothering about your interests. One day another day it will benefit you in a big way.

  8. These days Daily SIP, Weekly SIP, Fortnightly SIP and Monthly SIP are all available. So why invest only once a month? I am a fan of Daily SIP which I am doing with ICICI Prudential Technology Fund. My ELSS in Axis Long Term Equity Fund is on Weekly basis.

    1. Dear Anil,
      If you are comfortable with your setup, then go ahead. But it hardly matters at the end. Instead of it only creates clutter for us.

  9. Dear Basu sir,
    Superb analysis and very well written. Your articles are always worth reading. They are always specific, research oriented and more over, they provide very good knowledge about financial management.
    Thanks and regards

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