Which date to choose for equity mutual fund SIP?

Many a time investors come to us asking which is the right date for SIP investment. They also want to know whether splitting SIPs into two dates make any difference to their returns.

We did a research to find out whether date matter in SIPs.

We took HDFC Top 200 as a sample fund. Assume one has been investing Rs 1000 per month for a period of 10 years (120 months) from 2003 to 2013 in different dates 1, 5, 10, 15, 20 and 25.

We also split the Rs 1000 between two dates in a month.

Here it goes:

Observation and conclusion:

SIP on 10th of every month works the best compared to other dates. The splitting of dates is a bad option and in fact brings your overall returns down. We suggest that you choose a date that is closer to your salaries. It should not happen that by the time SIP hits your bank account you have insufficient balance.

As far as possible let the SIP hit your bank account in the period between 5 to 10 of every month.

Few of other funds:

The author is the Director of Fintotal Insights and Resources.