SIP vs Lump Sum Investing

A SIP (Systematic Investment Plan) invests a fixed amount at regular intervals; a lump sum invests it all at once. Both buy units of the same fund, so the fund's CAGR is the same — what differs is your personal return.

Why the fund's CAGR still matters

The fund's CAGR reflects the underlying portfolio's growth regardless of how you invest. Your realised return depends on when your money went in, which is why a SIP's outcome is measured by XIRR rather than CAGR.

Rule of thumb

• SIP suits regular income and reduces timing risk through rupee-cost averaging.
• Lump sum can outperform in a sustained bull run but carries timing risk.
• Either way, pick the fund on its category-adjusted CAGR and consistency.