The most popular small and flexi-cap categories have given an average negative returns of 15 per cent and 14 per cent over last one year, while it was down 7 per cent and 5 per cent over two years on the back of market mayhem amid the raging West Asia war.
Similarly, the average return from large and multi cap schemes were down 14 per cent and 13 per cent over one year and it dipped 5 per cent each in 2 years, according to the data sourced from Geojit Research.
Large and mid-cap funds have given a negative return of 12 per cent and 4 per cent over one and two year period, the same for mid-caps were 11 per cent and 3 per cent.
Given the market turbulence, the SIP stoppage ratio has already increase one percentage points to 76 per cent month-on-month in February.
MF Category Wise SIP CAGR (as of 25-Mar-26)
- Credits: Geojit Research, Geojit SIP Study report datasets
Shweta Rajani, Mutual Fund Head, Anand Rathi Wealth said it is natural to see some nervousness among investors when SIP returns turn negative and that often leads to thoughts of stopping SIPs.
However, investors should understand that the real benefit of SIP comes accumulating more units when the markets are volatile, she said.
Harsh Gahlaut, co-founder & CEO, FinEdge said SIP stoppage rates have already been trending higher over the past few years and the current phase of negative returns could accelerate this further.
“What we are witnessing now is a double impact, higher stoppages from investors reacting to unmet expectations, along with a slowdown in new SIP registrations as recent returns appear less attractive,” he added.
Shashank Udupa, Fund Manager, smallcase said while this can be scary for newer investors, SIPs are inherently designed for longer horizons and short-term underperformance is not unusual in equity cycles.
SIP pauses will increase among newer investors who entered during the recent bull phase and are more sensitive to near-term losses, said Udupa.
Ponmudi R, CEO, Enrich Money said SIPs are inherently designed to navigate market cycles and phases of weak or negative returns are integral to the long-term compounding process. In fact, such periods enable more effective rupee-cost averaging, allowing disciplined investors to accumulate units at lower valuations, he said.
Hariprasad K, founder LIvelong Wealth said with the Nifty correcting over 10 per cent from its highs and elevated volatility, it is natural for short-term SIP returns turn negative and trigger anxiety among retail investors.
However, the reaction is clearly bifurcated with investors in market for 2-3 years pressing the pause button, while those who have experienced the post-2020 rally staying strong, he added.
While pausing SIPs during downturns defeats their core principle of rupee-cost averaging, the real risk is to step out at the wrong time, he said.
Published on March 28, 2026