SIP and lump sum
Two ways money goes into a fund, all at once or a fixed amount at intervals, and how each is measured.
This explains how things work. It is not advice about what to buy, sell or hold.
A lump sum
A Lump sum is a single purchase. All the money buys Units at the NAV of the day the purchase counts for, so the price paid is that one day's price, high or low.
A SIP
A SIP (systematic investment plan) puts a fixed amount in at regular intervals, often monthly. Each instalment buys units at that day's NAV, so the same amount buys more units when the NAV is low and fewer when it is high. The cost per unit ends up an average of the prices over the period.
SEBI's worked example
SEBI's investor FAQ follows ₹1,000 a month for a year while the NAV moves between ₹9 and ₹11.50. The twelve instalments buy about 1,186 units, at an average cost near ₹10.12. The same ₹12,000 in one purchase would have bought 1,000 units at a NAV of ₹10, about 1,043 at ₹11.50 or about 1,333 at ₹9. Which comes out ahead depends on the path prices take, which is not known in advance.
Measuring the return of each
A single purchase held for more than a year is measured by its Annualised return. Money that went in on many dates is measured by XIRR, which counts each instalment from its own date. The portfolio page on this site takes both lump sums and SIPs and works out the XIRR in the browser.
Sources
- SEBI www.sebi.gov.in/sebi_data/faqfiles/sep-2024/1727242783639.pdf checked 02 Oct 2026
- Zerodha Varsity zerodha.com/varsity/chapter/measuring-mutual-fund-returns/ checked 02 Oct 2026