Your SIP is showing zero returns after two years? History says don’t stop yet

A two-year SIP showing little or no return can test an investor’s patience, particularly when monthly investments have continued without interruption. But a historical analysis of Nifty 500 TRI rolling SIP returns suggests that a weak first two years have not necessarily translated into poor five-year outcomes.

The CRISP Mutual Fund Scorecard for June 2026 by Share.Market (PhonePe Wealth) analysed more than two decades of rolling SIP data to examine what happened when investors encountered weak returns in the initial two years. The exercise covered 50 historical instances in which a two-year SIP generated either negative returns or returns of up to 5%.

What happened after a negative two-year start?

Of the 50 instances, 32 had two-year annualised SIP returns of 0% or less. The report then examined what would have happened if the SIP had been continued for another three years, taking the total investment period to five years.

The results were notably different.

None of the 32 cases remained in negative territory after five years. 9.4% produced annualised returns of more than 0% but up to 5%, while 21.9% delivered returns between 5% and 10%. Another 15.6% generated 10–15% annualised returns. The largest group—53.1% of the cases—ended with annualised returns between 15% and 20%.

In other words, among historical instances where a two-year SIP was at zero or below, continuing the investment through the five-year mark eliminated the incidence of a negative return in this dataset. More than two-thirds of these cases—about 68.7%—eventually delivered double-digit annualised returns.

Even sluggish returns improved

The report also looked at 18 instances where the initial two-year SIP return was above 0% but no more than 5%.

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Here too, the five-year picture improved substantially. 27.8% of these cases generated 5–10% annualised returns, while 38.9% delivered 10–15%. Another 27.8% landed in the 15–20% band and 5.6% crossed 20%. None remained at 5% or below. Overall, roughly 72% delivered double-digit annualised returns after the SIP was continued to five years.

Why the recovery can happen

The report attributes part of this effect to rupee-cost averaging. When markets remain weak, fixed monthly SIP contributions purchase more units at lower NAVs. If markets subsequently recover, those additional units can contribute to the improvement in overall returns.

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The broader data also reinforces the importance of the investment horizon. Over five years, the historical Nifty 500 TRI SIP data still showed a small, roughly 1% chance of negative returns. Extending the horizon to seven to 10 years reduced the historical risk of losing capital to zero. At 10 years, around 90% of outcomes delivered double-digit annualised returns.

The findings do not guarantee future returns. The scorecard itself cautions that past performance is not an indication of future results. But the historical evidence suggests that judging an equity SIP solely on its first 24 months can give an incomplete picture of its potential over a longer investment horizon.

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