Same SIP, 5 Years: ₹2L Gap Across Small-Cap Funds?
Two investors put ₹10,000/month into different small-cap SIPs for 5 years. One walked away with over ₹2 lakh more than the other. Picking the right fund matters more than most people think.
That ₹2.22L gap is roughly 18 months of a ₹12,000 grocery budget — lost just by picking the wrong fund.
Your SIP fund choice can make or lose this much in 5 years
Key Takeaways
Check your current small-cap SIP's 3-year and 5-year XIRR on your mutual fund app or on MF Central — compare it against the category average, not just your absolute returns.
Calculate the capital gains tax cost before switching funds: redemptions under 1 year attract 20% STCG tax; above 1 year, gains over ₹1.25 lakh/year attract 12.5% LTCG tax.
Avoid chasing the single top-ranked fund — instead shortlist 2–3 consistently top-quartile small-cap funds and consider a staggered switch over 3–6 months to average out timing risk.
Two investors put ₹10,000/month into different small-cap SIPs for 5 years. One walked away with over ₹2 lakh more than the other. Picking the right fund matters more than most people think.
Here's what happened: A ₹10,000 monthly SIP held for 5 years in top-performing small-cap funds grew to over ₹10.35 lakh, against a ₹6 lakh total investment.. The weakest small-cap funds in the same period returned as little as ₹8.12–8.13 lakh on the same ₹6 lakh invested — a ₹2+ lakh shortfall vs the leader.. The performance gap highlights how fund selection, not just the category, drives real-world SIP outcomes for retail investors..
What you should do: Check your current small-cap SIP's 3-year and 5-year XIRR on your mutual fund app or on MF Central — compare it against the category average, not just your absolute returns.. Calculate the capital gains tax cost before switching funds: redemptions under 1 year attract 20% STCG tax; above 1 year, gains over ₹1.25 lakh/year attract 12.5% LTCG tax.. Avoid chasing the single top-ranked fund — instead shortlist 2–3 consistently top-quartile small-cap funds and consider a staggered switch over 3–6 months to average out timing risk..
You don't need to redeem old units to switch SIPs. Stop the SIP in the underperforming fund and start a fresh SIP in a better one — your existing corpus keeps compounding while you avoid one large redemption tax hit.
For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.
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- [1]“Bandhan Small Cap Fund leads the category in 5-year monthly SIP returns: Check the list of the top and bottom 5 schemes” mint - money · 9 Aug 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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