Investing through a Systematic Investment Plan (SIP) can become frustrating when you have been putting money into an equity investment every month for two years but your returns are still close to zero. After 24 months of regular investing, seeing little or no growth may naturally make an investor wonder whether continuing the SIP is worthwhile.

Historical market data, however, offers an interesting perspective on such periods.

An analysis of more than two decades of Nifty 500 TRI data examined instances when a two-year SIP produced returns of 5% or less. It then looked at what happened when the investment period was extended to five years.

The findings suggest that a disappointing two-year period did not necessarily translate into poor five-year outcomes in the historical sample. But investors should remember that past performance cannot predict or guarantee future returns.

Why Are Two-Year SIP Returns Under Discussion?

The issue has become relevant because shorter-term SIP returns from the broader equity market have recently been weak.

According to the CRISP Mutual Funds Scorecard from Share.Market by PhonePe, cited in the report, one-year and two-year SIP returns for a broad-market benchmark such as the Nifty 500 TRI were around zero or even negative as of June 2026.

This can be discouraging for investors who started an SIP expecting their portfolio to show visible gains after a couple of years.

However, equity investments can experience prolonged periods of volatility, which is why evaluating a long-term SIP solely on the basis of its first 24 months may provide an incomplete picture.

Study Found 50 Instances of Weak Two-Year SIP Returns

The historical analysis identified 50 instances in which a two-year SIP in the Nifty 500 TRI generated an annualised return of 5% or less.

Out of these 50 instances, 32 recorded zero or negative returns after two years.

The remaining 18 instances delivered returns above zero but no higher than 5%.

The analysis then examined what happened when those SIP periods were allowed to run for another three years, taking the total investment horizon to five years.

The results changed considerably over the longer holding period.

What Happened to the 32 Zero or Negative Return Cases?

The most striking finding concerned the 32 historical instances in which the SIP return was either zero or negative after two years.

After extending the investment horizon to five years, none of those 32 cases remained in negative territory, according to the study.

The final annualised SIP return distribution was:

• 53.1% of cases: 15% to 20%
• 15.6% of cases: 10% to 15%
• 21.9% of cases: 5% to 10%
• 9.4% of cases: 0% to 5%

This means more than half of the historical cases that had looked particularly disappointing after two years eventually produced annualised SIP returns in the 15-20% range by the end of the five-year period.

The numbers are historical observations, though, rather than a forecast of what today's SIP investors will earn.

What About SIPs That Earned Only 0-5% in Two Years?

The other 18 cases in the study had delivered a positive return after two years, but the annualised gain was limited to between 0% and 5%.

Here too, the five-year results were considerably stronger in the historical data.

By the fifth year, none of these historical cases had an annualised return below 5%.

Around 72% of the cases eventually generated double-digit annualised returns of 10% or more.

This reinforces the broader point of the analysis: two years can be a relatively short period over which to judge the performance of an equity SIP.

Why Can an SIP Benefit During a Weak Market?

One of the key features of SIP investing is rupee-cost averaging.

When markets fall or remain subdued, the same monthly investment amount can purchase more units because the applicable NAV is lower.

For example, suppose an investor puts the same amount into an investment every month. When the NAV is high, the investor purchases fewer units. When the NAV falls, the same contribution purchases more units.

If markets subsequently recover, the units accumulated at lower prices also participate in that recovery.

This mechanism is one reason prolonged market weakness does not necessarily make regular investing ineffective.

However, rupee-cost averaging reduces the impact of timing individual investments; it does not eliminate market risk.

Five-Year SIPs Also Experienced Negative Periods

The broader rolling-return data in the study provides another useful perspective.

Across the roughly 20-year period examined, approximately 1% of five-year SIP instances still produced negative annualised returns.

That finding is important because it shows that even a five-year investment horizon cannot be treated as a guarantee of positive equity returns.

The historical picture improved further when the investment period was extended.

According to the report, the historical sample did not show negative SIP returns over seven-year and ten-year horizons.

Again, this is a description of the period studied rather than a promise that future seven- or ten-year investments cannot lose money.

What Happened Over a 10-Year SIP Period?

The ten-year rolling SIP data showed a much higher proportion of double-digit annualised returns.

Around 65% of the historical ten-year SIP instances generated annualised returns between 10% and 15%.

Another approximately 26% delivered returns in the 15-20% range.

Taken together, close to 90% of the ten-year cases in the study produced double-digit annualised returns.

This historical pattern demonstrates how investment outcomes can look very different when measured over longer periods.

Does This Mean You Should Never Stop an SIP?

No. The study should not be interpreted as a blanket recommendation to continue every SIP regardless of circumstances.

The analysis is based on historical rolling returns of the Nifty 500 TRI, rather than the performance of every individual mutual fund scheme.

An individual fund can underperform because of its portfolio strategy, management decisions, costs, investment style or other factors. An investor's financial circumstances, risk tolerance and goals can also change.

Therefore, a poor-performing individual mutual fund should not automatically be retained merely because broad-market historical data shows that some weak periods were followed by recoveries.

Two Years May Be Too Short to Judge Long-Term Equity Investing

The main takeaway from the analysis is not that every weak SIP will eventually deliver high returns.

Instead, it demonstrates that a zero or negative return after 24 months may say more about the investment period and prevailing market conditions than about what a long-term equity SIP will ultimately deliver.

The study examined Nifty 500 TRI historical rolling SIP returns calculated at the end of every month over more than two decades through June 2026. It does not guarantee similar results in the future.

Investors should therefore assess an SIP in the context of their investment horizon, financial goals, risk appetite and the quality of the underlying fund rather than looking only at short-term returns.

Disclaimer: Mutual fund and equity investments are subject to market risks. Historical returns do not guarantee future performance. Investors should evaluate their financial goals and risk profile and consider consulting a qualified financial adviser before making investment decisions.