Systematic Investment Plans (SIPs) are a popular way of investing regularly in mutual funds. They help investors build wealth slowly and steadily, without worrying about timing the market. But even with SIPs, it’s important to check if the portfolio is performing as expected. Sometimes, things may silently go wrong. The signs are not always obvious.
Here are five clear warning signs that an SIP portfolio may be drifting off track. If any of these are visible, it might be time for a closer review and correction.
One major warning signal is when more SIPs are being stopped or cancelled than started. In early 2025, India saw a sharp rise in SIP stoppage ratio. This number shows how many SIPs were stopped compared to new ones started in the same month. In June 2025, this number was around 78%. A few months earlier, it had crossed 100%. That means more people were cancelling SIPs than starting new ones.
A rising stoppage ratio shows that many investors are pulling back their investments due to fear, short-term losses, or lack of confidence in the market. While markets can be unpredictable, SIPs work best when allowed to run for a long time without breaks. Stopping them during market corrections can reduce future returns and interrupt the power of compounding.
Another concern is the number of SIPs being closed. In 2025, over 1 crore (10 million) SIP accounts were shut down. While new SIPs were still being registered, the number of closures exceeded the new ones for some months, leading to negative net SIP additions.
Even if monthly investments are increasing in value, this trend shows that many investors are choosing to exit their SIPs. This may be due to uncertain economic conditions, market volatility, or disappointment with returns. If SIPs are being closed early, it suggests poor planning or reacting emotionally to short-term events.
SIP investing is all about patience and staying the course. Frequent exits make it hard to achieve long-term financial goals like buying a house, saving for children’s education, or retirement.
Many investors open new SIPs frequently—whenever they receive bonuses, hear market news, or follow social media trends. Over time, this can create a large and complicated portfolio with similar types of funds. For example, having three or four mid-cap funds in a portfolio may not add real diversity. Instead, it might just increase confusion and management difficulty.
When there is too much overlap between funds, it defeats the purpose of diversification. Instead of spreading risk, it concentrates risk in one area. It also becomes harder to track each fund's performance and understand where the money is really going.
A better approach is to keep a limited number of strong-performing funds that match long-term goals. It’s also useful to top-up existing SIPs in good funds rather than opening new ones for every investment.
In recent years, new types of mutual funds based on themes like electric vehicles, defence, technology, and ESG (Environmental, Social, Governance) have gained popularity. While these funds can offer growth when the theme is strong, they can also be risky and short-lived.
Many investors start SIPs in these funds during a market rally. But when the theme loses favour, returns may drop sharply. This type of investing is like trying to time the market without proper analysis.
The strength of SIPs lies in regular, long-term investing, not in following fads. Trend-based SIPs should only be a small part of the portfolio and must fit well into the overall investment strategy.
One of the biggest signs that something is wrong is poor returns compared to average mutual fund returns in the same category. For example, in mid-2025, top-performing small-cap funds delivered 20–22% annual returns. Some large-cap funds gave 11–17% per year. If an SIP is giving much lower returns, it may be underperforming or may not suit the current market conditions.
Sometimes, poor results happen because the portfolio has too many conservative funds, too few equity funds, or funds that haven't been reviewed in years. In other cases, the fund manager may not be performing well anymore.
Regularly comparing returns with category averages helps find weak links in the portfolio. Rebalancing the portfolio—by increasing allocation to better-performing sectors or changing underperforming funds—can improve results.
By mid-2025, the total investment in mutual funds in India had reached over ₹72 lakh crore. SIPs contributed a major share to this growth. Monthly SIP inflows crossed ₹27,000 crore by May and June. This shows that many investors still believe in SIPs, despite some challenges.
However, the number of people stopping their SIPs has also increased. This mixed picture highlights the importance of reviewing portfolios. Long-term investors who stay consistent and maintain a balanced portfolio are more likely to benefit in the coming years.
Experts believe the next market upswing may begin after September 2025. Investors with strong SIP discipline and good asset allocation will be well-positioned to take advantage of future gains.
Here is a simple checklist to improve a SIP portfolio:
SIPs are one of the most powerful tools for building wealth over time. But they need attention, just like any other investment. Simply starting a SIP is not enough. Regular monitoring, proper selection of funds, and staying invested for the long run are key to success.
Five major signs show if a SIP portfolio is off-track: high stoppages, shrinking accounts, too many funds, trend-based investing, and poor returns. Recognising these signs early allows corrective action. With a well-managed and reviewed SIP portfolio, financial goals can be achieved with less stress and more confidence.