Past SIP Performance

Understanding Past SIP Performance

Past SIP performance refers to the historical returns generated by an investment made through a Systematic Investment Plan over a specific period. Analyzing past SIP performance allows investors to evaluate the growth of their investments, assess the consistency of returns, and identify trends or patterns that may impact future investment decisions.

Significance of Past SIP Performance Analysis

Performance Evaluation: Reviewing past SIP performance enables investors to evaluate the effectiveness of their investment strategy and assess whether the chosen mutual fund schemes have met their investment objectives. By comparing actual returns with expected returns, investors can gauge the performance of their investments and make necessary adjustments.

Risk Assessment: Past SIP performance analysis helps investors assess the level of risk associated with their investments. By examining the volatility of returns and the frequency of fluctuations, investors can determine the risk-adjusted performance of their SIP investments and make informed decisions about portfolio rebalancing or reallocation.

Decision Making: Past SIP performance analysis provides valuable insights for investors to make informed decisions about their future investments. By identifying top-performing funds, understanding the factors driving performance, and learning from past mistakes, investors can refine their investment strategy and optimize their portfolio for better returns.

Key Metrics for Past SIP Performance Analysis

  • Absolute Returns: Absolute returns measure the actual percentage change in the value of SIP investments over a specific period. Investors can calculate the absolute returns of their SIP investments to assess the overall growth and profitability of their portfolio.

  • Annualized Returns: Annualized returns provide a standardized measure of SIP performance, expressing the average annual rate of return over the investment period. Annualized returns help investors compare the performance of different SIP investments and evaluate their consistency over time.

  • Rolling Returns: Rolling returns analyze the performance of SIP investments over multiple overlapping periods, providing insights into their consistency and resilience across different market conditions. Investors can use rolling returns to assess the long-term performance stability of their investments and identify trends or patterns.

How to Analyze Past SIP Performance

  • Gather Data: Collect historical data on SIP investments, including investment amounts, dates, NAVs (Net Asset Values), and total returns.
  • Calculate Returns: Calculate absolute returns, annualized returns, and rolling returns for each SIP investment using relevant formulas or online calculators.
  • Compare Performance: Compare the performance of SIP investments against relevant benchmarks, peer group averages, and investment objectives.
  • Identify Trends: Identify trends or patterns in SIP performance, such as consistent growth, periods of underperformance, or market outperformance.
  • Learn Lessons: Learn from past SIP performance analysis to refine your investment strategy, adjust portfolio allocation, and set realistic expectations for future investments.

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