Should I continue my SIP in HDFC Top 200 Fund?

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“Should I continue my SIP in HDFC Top 200 fund? I am worried about its dip in performance”. In this post, I would like to address this nagging question that many investors in the fund have.

Truth be told, this post is mainly a promo for a yet-to-be published update to the Mutual Fund SIP XIRR Tracker

The basic idea is, suppose we track the returns from our SIPs (XIRR) and that of the funds benchmark, month by month, we should be able to determine its performance. This is an alternative to the

I am bit partial to monthly XIRR tracking because it is a lot more ‘personal’. We can start tracking the fund in the month we set up our SIP and see how it did  it is doing.

I have now added multiple indices downloaded from Moneycontrol and a few total return indices which have to be manually updated from the S&P website. I shall post the updated version perhaps tomorrow.

For now, let us try and answer, Should I continue my SIP in HDFC Top 200 Fund?

This is the tracking data from 3rd April 2006. So it close to a ten-year SIP.

This is wrt BSE 200 price index
This is wrt BSE 200 total returns index. Notice the reduction in outperformance when the TRI is used!

On the left, you have the XIRR data for the fund and benchmark, along with the green line which represents the duration of the SIP in years (in both plots). Please note the return is calculated after each instalment. So it is cumulative and not monthly performance.

On the right the cumulative percentage outperformance is tracked. Had the funds return dipped below its benchmark then the outperformance graph would have dipped.

I think the above performance is quite good.

To get some context, let us look at the performance of a dud fund: HSBC Equity:

SIP-tracking-1 By year four, the performance had dipped so much that one should probably have exited the fund. More about this later.

Now for a fund which has done better than HDFC Top 200:


In terms of consistency, this is better than HDFC Top 200.

Hey wait a minute! The data above is a for a 10-year old SIP. What If I had started the SIP 5 years ago, say in Feb. 2011.


That is not a great sight, is it?! Verdict: Chuck it, if you this is not acceptable to you.

As mentioned above, HDFC Top 200 is just an excuse. My hope is that this kind of tracking will enable investors to take better decisions wrt their SIPs.

For the 5 year SIP, after 3 years, the data will look like this:


If this is not acceptable, one could have got out even then. However, expecting too much consistency may mean frequent churning so some moderation is necessary. The fortunes of the fund may turn around after we exit!

Faith in the fund management or intolerance to dips in performance are personalized ideas. When the market crashes, all top performers today may become duds, or medium performers may become worse. Personally, I believe in giving the fund management at least 3-5 years time to come good (beat the index by a significiant margin). If this does not happen, it is time to say goodbye and move on.

Why is the 10-year SIP data so much different than the 5-year SIP data? That is the nature of any volatile asset class. The performance will depend on the date of entry. The data for 12/15-year old SIPs would be even better.

What do you think? Is this method tracking and decision making justified?

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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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  1. I prefer rolling returns as this is still largely a function of dates chosen. Rolling returns analysis makes it a bit more agnostic to the actual time and markets performance.

    1. Not really. Even there, one has to select a start and a end point. Rolling returns help us understand spreads. This is more personalized as I choose my SIP date and determine outperformance. There is no need to impersonal about it. It is after all my investment and I need to know how it is doing.

  2. This will help with performance tracking for existing investments but not a great way to decide about the future i.e.hold/add/sell decisions as it would lead to personal experience coloring the truth. Rolling returns would be a better(though certainly not fool proof) guide for that.

  3. Some of my SIP investors are throwing in the towel. I told them to ride the downtime. But they say they have been trapped into SIP by MFs and their agents.

  4. I don’t generally comment on your MF blog posts, but you have used a very dangerous word in this one, so I’m going to point it out. “Faith”. In investing, you cannot have faith on anything. This might sound too extreme, but that’s the reality when it comes to money. What makes you have faith on fund manager A vs fund manager B? Are we as retail investors even qualified to talk about Faith on a fund manager? How much can we know about a fund manager anyway? The media reports never paint a full picture (just look at the politicians).
    At the risk of sounding like a broken record, GS JUNIOR BEES has outperformed HDFC top 200 over 1,3,5 yr timeframe and that is without any risk regarding the fund manager. Isn’t that a far better alternative for retail investors rather than trying to give some fund manager you don’t know about 3-5 years to prove himself/herself based on Faith?

    1. I have used the word faith once in the post and in a pretty generic way! “Faith in the fund management or intolerance to dips in performance are personalized ideas.”
      As for index investing, when 70% of funds beat the index, I think active funds are pretty good idea for the retail investor.

  5. I have started many of my sip in 2007 including top200. Then I moved all funds to direct in 2012-13. I have also invested additional amount other than regular sip. Also I have switched funds.I wanted to know is there any calculator to calculate cagr for this case. I know I will have to manually enter many values.


  6. The ups and downs are there-Just like tides in ocean of MF….Future cannot be predicted….Just like Bad loans in Bank,

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