If you opened your mutual fund app recently and saw a red number next to a two-year-old SIP, you have plenty of company. As of 16 October 2026, the Nifty 50 closed at 23,146, about 12% below its January 2026 record high of 26,373. Many SIPs started in 2024 or 2025 have invested a large share of their money at higher prices than today’s. This guide, part of our series on investing in a flat market, explains what your statement is actually telling you.
The three numbers on your statement
| Measure | What it tells you | Where it misleads |
|---|---|---|
| Absolute return | (Current value − amount invested) ÷ amount invested. Simple “up or down” in percentage terms. | Ignores time. A 10% gain over one year and over five years look the same. |
| CAGR | Annualised growth of a single lump sum between two dates. | Doesn’t work for SIPs, because money goes in on many different dates. |
| XIRR | Annualised return that accounts for the date and size of every instalment and redemption. | Can look extreme over short periods (a few months), because small moves get annualised. |
For a SIP, XIRR is the fairest single number, because your first instalment has been invested for two years while last month’s has been invested for a few weeks. Absolute return treats them as if they had all gone in on day one.
A worked example: two years of SIP in a sideways market
Here is an illustrative case, not a real fund. An investor puts ₹10,000 on the 5th of every month for 24 months, from November 2024 to October 2026, into a fund whose NAV (price per unit) starts at ₹100. The NAV climbs to ₹115 over the first seven months, slides to ₹92 by month 16, then recovers to ₹97.
Illustrative NAV path over 24 monthly SIP instalments
Illustrative NAVs chosen to resemble a sideways market; not a real fund or index. ₹10,000 invested on the 5th of each month; valuation on 20 October 2026. Costs, exit loads and taxes ignored.
Three things stand out:
The NAV is down only 3%, but the SIP is down 4%
The fund fell from ₹100 to ₹97. But in the first year, more of the money went in at ₹103–₹115. Your average cost per unit, ₹2,40,000 ÷ 2,375.42 units, is ₹101.03, above the starting NAV.
“Back to where it started” is not break-even
If the NAV recovers to exactly ₹100, the SIP would be worth about ₹2,37,500, still below the ₹2,40,000 invested. Break-even is ₹101.03, your average cost, not the price on day one.
The low months were not wasted
Instalments made when the NAV was ₹92–₹95 bought more units for the same ₹10,000. Those units are already in profit at ₹97. This is rupee-cost averaging at work: it doesn’t prevent losses, but it lowers your average cost when prices dip during the SIP.
Why XIRR and absolute return can differ a lot
In the example above they happen to be close, because the losses were spread fairly evenly through time. They often aren’t. Take a second illustrative case: ₹10,000 a month for 12 months in 2025, worth ₹1,26,000 at year-end.
Absolute return: 5.0%
₹6,000 gain on ₹1,20,000 invested. True, but it ignores that the December instalment was invested for only a few weeks.
XIRR: about 9.6% a year
On average, your money was invested for roughly half the year, so the same ₹6,000 gain is a much higher annualised rate.
The reverse is also true: a small absolute loss on a recent SIP can show as a large negative XIRR, because a few months’ loss is being expressed as a yearly rate. That is why XIRR figures for SIPs younger than about a year jump around so much. Look at them, but don’t panic over them.
How to calculate your own XIRR
Most fund apps and your consolidated account statement show XIRR. To check it yourself in Excel or Google Sheets:
- In column A, list every SIP instalment as a negative number (for example −10000), and the current value as a positive number on the last row.
- In column B, list the date of each instalment, and today’s date against the current value.
- Use =XIRR(A2:A26, B2:B26) and format the result as a percentage.
Include every top-up and any partial redemption with its date, or the result will be wrong.
Red SIP: what it does and doesn’t mean
It usually means…
- Much of your money went in when prices were higher than today.
- Your holding period is short relative to how long equity can stay flat.
- You are buying more units per rupee while prices are lower.
It doesn’t automatically mean…
- The fund is bad. Compare it with its own benchmark over the same period first.
- You must stop. That depends on your goals and finances; see pause, stop or continue your SIP.
- You should top up with borrowed money. Please don’t.
The right questions are about you, not the market: Is this money for a goal at least five to seven years away? Do you have an emergency fund, so you won’t be forced to sell? Are you carrying costly debt that is quietly costing more than any SIP will earn? If the answer to the last one is yes, read pay off debt or invest? first.
When a red SIP meets an urgent bill
The painful situation is needing cash while your SIP is below cost. Redeeming locks in the loss; a 7-day app loan can cost far more than the loss you’re avoiding. A buffer prevents that choice altogether, which is why an emergency fund comes before investing. If you genuinely need funds for a real expense, a regulated personal loan with a fixed EMI and a clear Key Fact Statement is a calmer option than revolving card debt. It should never be used to buy more units or to “wait out” a loss.
See the whole picture before your next move
Our flat-market guide pulls together SIP decisions, emergency funds, debt and scams in one place.
This is general information, not investment advice. Consider a SEBI-registered investment adviser for personal advice. Past performance does not indicate future returns.
Frequently asked questions
Why is my SIP showing negative returns?
Usually because a large share of your instalments bought units at higher prices than today’s NAV. Your average cost is above the current price, even if the index is only slightly lower than when you started.
What is XIRR in mutual funds?
XIRR is an annualised return that accounts for the date and amount of every investment and withdrawal. It is the standard way to measure SIP performance because each instalment is invested for a different length of time.
Which is better to track, absolute return or XIRR?
For SIPs older than about a year, XIRR is more meaningful. For very recent SIPs, absolute return is easier to read because XIRR annualises small short-term moves into large numbers.
Why is my XIRR so high or so low after a few months?
Annualising a short period magnifies it. A 2% move over two months can show as a double-digit yearly XIRR, positive or negative. It settles as the holding period lengthens.
Is a negative XIRR a reason to stop my SIP?
Not on its own. Compare the fund with its benchmark, check your goal timeline and emergency fund, and consider personal advice from a SEBI-registered adviser.
How do I calculate XIRR in Excel?
List each instalment as a negative amount with its date, add the current value as a positive amount with today’s date, and use the XIRR function on the two columns.
Sources: Nifty 50 close of 23,146 on 16 Oct 2026 (Kotak Neo market update, 19 Oct 2026); record high of 26,373.20 on 5 Jan 2026 (Goodreturns, data as of 1 Oct 2026). The SIP example is our own illustrative calculation. Figures as of October 2026; check the official source before acting.
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