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At Cafemutual Ideas Fest 2025, Rajiv Maniar, Executive Vice President & Head of Sales & Distribution at HDFC Mutual Fund, shared some interesting insights on SIPs.
Rajiv noted that while starting an SIP is easy, very few investors stay committed for more than 10 years.
Here are some key highlights from his session.
SIP journey matters
Rajiv emphasized that SIPs have played a critical role in the growth of the mutual fund industry. Over the last 5 years, 72% of the total money collected under equity mutual funds has come through SIPs. He added that a majority of SIPs have delivered a CAGR of 13% over five years.
SIP returns across durations
Rajiv pointed out that “Rome wasn’t built in a day,” and used a few examples to show how the proportion of investment amount and returns evolves over time in an SIP portfolio:
- In 5-year SIPs, 73% of the total investment corpus comes from the principal (investor’s contribution)
- In 10-year SIPs, the principal contribution drops to 50%
- For 20-year SIPs, the principal makes up just 24% of the total corpus
What happens if you go beyond 20 years?
If an investor continues an SIP beyond 20 years, the principal’s share in the investment corpus reduces even more significantly.
Rajiv explained that in a 30-year SIP, the principal accounts for just 10% of the total corpus. If extended beyond 30 years, 96% of the investment corpus comes from fund returns and only 4% from the investor’s own contributions.
He added that an SIP of Rs.2 lakh per month for 30 years can grow the investment corpus to Rs.70 crore. If the same SIP continues for 40 years, the corpus can reach Rs.237 crore.
SIP pays out even in adverse or stagnant markets
Rajiv cited Japan’s Nikkei 225 index—which has remained stagnant for over 35 years since 1990—as an example. Despite this stagnation, an SIP in the index has still delivered a CAGR of 4.56%.
Wrapping up the session, Rajiv remarked that with advances in technology and healthcare, life expectancy is increasing. “If we are going to live longer, we should also invest longer. And data shows that SIPs are one of the best tools for long-term capital creation,” he said.
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