Will daily or weekly SIPs help you to earn better returns?

Most equity mutual fund investors usually opt for monthly SIPs or systematic investment plans. It’s convenient because most of us get monthly salaries. However, many investors wonder whether opting for daily or weekly SIPs will help them to earn better returns.

ETMutualFunds looked at the XIRR returns of SIP investments for daily, weekly, and monthly frequency. The schemes that completed 10 years or more were considered for the study. Around 145 schemes completed 10 years of existence. We considered XIRR returns for 10 years starting from May 31, 2013 to May 31, 2023. We considered equity categories such as large cap, mid cap, large & mid cap, small cap, multi cap, flexi cap, focused fund, value, and contra fund categories for the study.

We randomly choose one scheme each from all these equity categories. The returns offered by these equity schemes in all frequencies were similar (See table). For example, Canara Robeco Emerging Equities Fund offered 16.90% XIRR returns in daily SIP, 16.89% in weekly SIP, and 16.90% returns in monthly SIP. The scheme offered 16% return in all frequencies.



These examples showed that there was no real difference in SIP returns made on daily, weekly, or monthly. The schemes offered similar returns in all three frequencies.

SIPs are best suited for a long period of time. If you are investing for a long period of time, the frequency of SIP does not have a major impact on returns. Moreover, adding daily or weekly SIP would result in many entries and you may find it difficult to keep track of your transactions. Multiple entries per scheme in a daily or weekly SIP will be more compared to a monthly SIP. A monthly SIP is better to track over a long period of time.

Note, the above exercise is not a recommendation. The main reason for this exercise was to see how equity schemes perform with different SIP frequencies. One must always choose a scheme based on investment goal, risk appetite and investment horizon. SIP frequency will not make a difference to the returns.