SIP vs Lumpsum Backtester

This is the most common question Indian mutual fund investors ask: should I invest a lumpsum amount at once, or spread it across monthly SIPs? The textbook answer — "SIP is safer due to rupee cost averaging" — is only half the story. The real answer depends on which fund you pick, what the market did during that period, and how long you stayed invested.

This backtester settles the debate with data instead of opinions. It uses actual historical NAV data from AMFI to simulate both strategies — lumpsum (full amount invested on day one) and SIP (equal monthly instalments) — for any mutual fund scheme over 1, 3, 5, or 10 years. The results reflect real market volatility, crashes, and rallies — not theoretical assumed returns.

In rising markets, lumpsum typically outperforms because the full capital is deployed early at lower NAVs. In volatile, falling, or sideways markets, SIP wins because rupee cost averaging buys more units when prices are low. This tool shows you which strategy actually won for a specific fund over a specific period — so you can make informed decisions based on evidence, not assumptions.

Rupee cost averaging is the core advantage of SIP investing. When you invest a fixed amount every month, you automatically buy more units when the NAV is low and fewer units when the NAV is high. Over time, this brings down your average cost per unit — without you having to predict or time market movements.

Example: If you invest ₹10,000/month in a fund whose NAV fluctuates between ₹40 and ₹50 over 6 months, your average cost per unit will be lower than ₹45 — because you bought more units during the months when NAV was ₹40. A lumpsum investor who bought at ₹45 on day one would have a higher average cost.

This effect is most powerful in volatile markets. In a steadily rising market, rupee cost averaging actually works against you — because you keep buying at progressively higher NAVs. That's why lumpsum can outperform SIP during bull runs.