Comperative Study on SIP vs. Lump Sum Investment in Mutual Funds

This study compares two widely used mutual fund investment strategies—Systematic Investment Plan (SIP) and Lump Sum investment—by evaluating their returns, risk, and performance across equity, debt, and hybrid mutual fund categories in India during the period 2021–2026. The research adopts a descriptive and analytical approach using secondary data collected from AMFI, SEBI, mutual fund factsheets, and financial databases. Statistical techniques such as the Paired Sample t-test, F-test, One-Way ANOVA, and Independent Samples t-test were applied to examine differences in returns, risk, fund categories, and market conditions. The findings indicate that SIP generated a slightly higher average return (6.72%) than Lump Sum investment (5.67%), although the difference was not statistically significant. Similarly, no significant difference was observed in the level of risk between the two investment methods. However, the study found a significant variation in performance across different mutual fund categories, with hybrid funds showing a more noticeable difference between SIP and Lump Sum investments. The results suggest that neither investment strategy is universally superior; instead, the appropriate choice depends on an investor's financial goals, risk tolerance, investment horizon, market conditions, and fund category. The study provides valuable insights for investors, financial advisors, and researchers in selecting suitable mutual fund investment strategies.