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Charts & Analysis

Chart: 10 Year SIP Returns on Sensex and Nifty are Less Than 8%


Demonetisation has had an impact on the markets, for sure, with November being a lousy month and markets falling. In effect, the 10 year SIP return on the Sensex has fallen to 6.5%. (For the Nifty, it’s marginally better at 7.4%)
We consider the rolling 10 year SIP return – meaning, at any point P on the x axis, the graph shows the % return of a 10 year systematic investment of the same amount every month. (This is the “CAGR”, or the compounded annual growth rate).
We do this so we understand if equities have done better or worse than, say, fixed deposits. Over 3, 5 and 10 years now, the Sensex rolling SIP return has fallen to single digits in CAGR terms.
The Nifty returns for 3 year, 5 year and 10 year SIPs are currently 9.5%, 10.6% and 7.4% respectively.
Note that these are returns that don’t include dividends. If you include dividends, the return bumps up by 1% to 2%. A Nifty Index fund has done about 9% in the same time.
Many managed funds have done better (at least those that have a 10 year track record), and we’ve seen annual returns of 13%+. Remember the Nifty is only 10% off the all time highs, so it’s not like it’s an unreasonably depressed market.

The Monthlies: Nifty Still up 3% for the Year

Our monthly Viz gives us an idea of how things have panned out.
And here’s the Sensex (Click for a larger image). The Sensex has done much worse than the Nifty, with just 0.4% gains for the year. sensex-monthly-returns
The month of December is usually kind on markets. Median returns are 4%+. This is also the FII holiday season. But still, the last two years have seen negative returns in December. Will 2016 buck the trend?


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