CEO Speak December 2025

Market Noise Vs SIP Discipline: Choose Wisely

India’s broad market moved higher in November. The markets rewarded certain sectors, but overall gains were modest, and volatility remains real. The mutual fund industry reached an all time high in October 2025, with AUM at about INR 79.9 lakh crore. SIP activity hit a record high in October 2025: monthly SIP inflows of INR 29,529 crore, the highest ever, marking modest month on month growth. Importantly, SIP assets held in the industry rose to about INR 16.25 lakh crore, roughly 20 per cent of total industry AUM—a clear sign that SIPs are no longer a niche but a core way investors hold assets.

Interestingly, we are also witnessing some investors stopping their SIPs. It is possible that some of them are planned but some of them are also hasty emotional decisions taken because of the volatility of the past many months in the markets.

Why Are SIPs Being Stopped?

• Profit-booking - after a long, strong market rally, some investors feel compelled to book their gains or fear a potential correction.
• Genuine need for household cash-flow - from EMIs to rising discretionary spends—often lead investors to pause small but regular outgoings like SIPs.
• New financial goals or shifting priorities - such as home purchases, travel expenses, or education fees payments.
• Panic decisions where investors react to short-term volatility or negative headlines, assuming SIP stoppage is a “safe” move.

Why Should Investors Review their portfolio?

While reviewing SIPs periodically is healthy—especially to realign them with life goals, income changes, or risk appetite—stopping SIPs entirely often breaks the long-term compounding journey. SIPs are designed to ride out market volatility, not avoid it. Pausing them during market highs means investors miss cost averaging opportunities during dips. Similarly, stopping SIPs during corrections deprives portfolios of the very units that fuel long-term wealth creation when markets rebound. History shows that investors who remain invested through cycles typically outperform those who stop and restart based on emotions.

Why staying invested matters?

To understand this better, let us look at a simple factual data...

Investor A started an SIP in Nifty 500 TRI (Equity category) on September 1, 2019 but redeemed after a couple of months on May 31, 2020 out of panic, when pandemic-driven volatility made the portfolio look negative, with an XIRR of - 25 per cent. By exiting early, A effectively locked in short-term losses.

Investor B, who began the SIP at the same time but continued till 30 Nov 2025, stayed invested through the pandemic fall and the subsequent recovery. Thanks to long-term compounding, B’s investment delivered an XIRR of 18 per cent.

This illustrates how stopping the SIPs breaks the compounding effect that comes by investing.

Important Note: SIP Return are calculated on XIRR basis. Past performance may or may not be sustained in the future and is not indicative of future results.

The Smart Approach: Review, Don’t Retreat

Investors should therefore conduct a simple annual SIP health check—Are my goals still the same? Has my income changed? Should I increase, decrease, or simply maintain my SIP amounts? But unless there is a major financial emergency, it is advisable to stay invested and continue the monthly discipline.

As your income grows, it is advisable that your SIP contribution per month also should increase instead of remaining static. Consistent SIPs turn volatility into opportunity, keep investors aligned to their long-term goals, and ultimately help build meaningful wealth—with far less stress than trying to time the market.

Market returns will co exist with continuing volatility and mixed performances across funds and sectors. For investors who remain focused on long term goals, SIPs offer a proven way to participate in the upside when it appears and to do so without getting derailed by short term noise.

Thank you for your trust. We at HSBC Mutual Fund remain committed to managing your investments with discipline, transparency, and a long term view.

Happy Investing.

Views provided above are based on information in public domain and subject to change. Investors are requested to consult their financial advisor for any investment decisions.

Source:AMFI, MFI Explorer, CRISIL, Bloomberg. Data as on Nov 30, 2025 or as latest available

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