Stories
SIP vs Lump Sum: Flexi-Cap Funds Show Diverse Long-Term Returns Over 32 Years
- •A Moneycontrol analysis compared Rs 1 lakh lump-sum and Rs 10,000 monthly SIP investments in 13 flexi-cap funds with over 15 years of track record.
- •HDFC Flexi Cap Fund's Rs 1 lakh lump sum at inception grew to Rs 1.98 crore, while a Rs 10,000 monthly SIP amounted to Rs 21.57 crore.
- •Franklin India Flexi Cap Fund's Rs 1 lakh lump sum reached Rs 1.52 crore, and its SIP investment grew to Rs 16.07 crore.
- •Longer investment periods do not automatically guarantee a larger corpus; fund performance and CAGR significantly impact returns.
- •SIP returns (XIRR) often differ from lump-sum returns (CAGR) due to monthly investments across varying market levels, as seen in HDFC Flexi Cap (18.12% CAGR vs 20.05% XIRR).
Key Questions Answered
A Rs 1 lakh lump-sum investment at inception in HDFC Flexi Cap Fund would be worth about Rs 1.98 crore today, while the same investment in Aditya Birla Sun Life Flexi Cap Fund would be around Rs 1.89 crore, and in Franklin India Flexi Cap Fund it would be roughly Rs 1.52 crore.
A Rs 10,000 monthly SIP since inception in HDFC Flexi Cap Fund grew to around Rs 21.57 crore from a total investment of Rs 38.1 lakh. In Franklin India Flexi Cap Fund, Rs 38.5 lakh invested through monthly SIPs grew to about Rs 16.07 crore, and in Aditya Birla Sun Life Flexi Cap Fund, Rs 33.8 lakh grew to roughly Rs 7.11 crore.
A lump-sum CAGR measures the return on money invested on a single starting date, whereas an SIP continuously invests every month across various market levels. Because of this rupee cost averaging across different market cycles, a fund's SIP XIRR does not necessarily mirror its lump-sum CAGR.
