Kicking off your SIP journey in FY26? Mutual fund experts share pro tips!

With the beginning of the new financial year, many new investors looking to start their mutual fund SIP journey are advised by experts that this is a good time to begin SIPs. They recommend considering categories that offer diversified exposure.

“FY26 is a good time to begin SIPs. New investors can start with Multi-Asset, Flexi Cap, or Balanced Advantage Funds to get diversified exposure. Avoid starting with niche or high-risk segments like small caps initially,” recommends Sagar Shinde, VP of Research at Fisdom.

Another expert recommends that this is the perfect time to start the SIP journey, as the market is undervalued. Investors should identify their risk appetite, investment horizon, and goals, and invest accordingly.

“It is always a good time to start investing through an SIP, especially right now as the market is undervalued. However, for SIP investors, market timing shouldn’t be a concern. The true advantage of SIPs lies in their ability to average out costs over time, making short-term fluctuations irrelevant. Hence, we recommend investors focus on staying consistent and letting the power of compounding work in their favor,” said Hrishikesh Palve, Director, Anand Rathi Wealth Limited.

“For first-time or new investors, the first step would be to figure out your goals and investment horizon. Understand your risk and return objectives, and then pick an appropriate asset allocation strategy in accordance with your risk and return appetite,” he added.

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While planning for mutual fund investments in the new financial year, Vishal Dhawan, CEO of Plan Ahead Wealth Advisors, a wealth management firm in Mumbai, recommended that investors who can manage high volatility should consider lumpsum investing in categories where valuations are reasonable. Individuals who are averse to volatility can start SIPs and look to accelerate investments if valuations become attractive and macroeconomic uncertainties reduce.
For investors continuing with their SIPs or looking to add new funds to their portfolio in FY26, Palve recommends that if one has a long investment horizon, an asset allocation of 80:20 in equity to debt would be suitable. For the medium term, it would be 70:30, and for a short investment horizon, 100% allocated to debt would be most appropriate.
Investors should diversify across categories, AMCs, and market caps with a portion of 55:20:25 in large, mid, and small caps. There are many fund options available, such as flexi-cap, multi-cap, large cap, etc., which allow investors to reap the diversification benefits across different categories and segments. Investors in FY26 should focus on disciplined investing, aligning their portfolios with their long-term goals and rebalancing where required,” he further added.

On the other hand, Shinde recommends a diversified SIP strategy with a tilt towards flexi cap funds and one should have limited exposure to mid caps and small caps plus can consider gold and silver funds for additional diversification.

“In FY26, follow a diversified SIP strategy with a tilt towards Flexi Cap funds that dynamically manage allocation. Those starting fresh can also consider Multi Asset funds as a good starting point, offering built-in diversification across equity, debt, and gold. Add limited exposure to mid and small caps for growth, and consider gold and silver funds for additional diversification,” Shinde recommends.

In the financial year 25, the benchmark indices – Nifty 50 and BSE Sensex – have gained 4.70% and 4.59%, respectively. In the calendar year 2025 so far, these indices have lost 0.94% and 1.39%, respectively.

Looking at the current market conditions, Shinde mentions that the ideal SIP mix could be 50-60% in Flexi Cap, Balanced Advantage, and Multi-Asset funds for core stability; 15-20% in mid and small caps for growth; and 10-15% in gold/silver funds to hedge against volatility and inflation.

By planning the SIP strategy, Palve recommends that 20-40% of one’s income inflows should be directed towards SIP investments every month, and investors should plan accordingly.

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“Market volatility is normal, and investors should not be bothered by it. Ride the volatility through a diversified portfolio. Investors should invest in active diversified equity funds like market cap-based funds and strategy-based funds like focused, value, and contra funds, as they provide wide diversification across different segments and categories in the market and help generate 2 to 3% more alpha over the Nifty 50 and front-line markets,” he added.

An analysis of SIP performance showed that around 130 equity mutual funds have offered double-digit losses to SIP investors and have lost up to 34% in financial year 25. There were 269 schemes during the mentioned period, of which 262 gave negative returns on SIP investments.

The top losers in the list were from Samco Mutual Fund. Samco Flexi Cap Fund gave a loss of around 33.56% on SIP investments in FY25. A monthly SIP of Rs 10,000 made in this fund on April 1, 2024, would have been worth Rs 98,306 now, against an invested amount of Rs 1.20 lakh. Samco ELSS Tax Saver Fund lost 29.12% on SIP investments in the same period.

As many equity mutual funds offered double-digit losses, investors are looking for suggestions on how to proceed with their existing SIPs and whether they should reduce exposure.

While recommending to continue the existing SIPs, Shinde advises that one can continue SIPs in diversified categories like Flexi Cap and Balanced Advantage, reduce exposure if overly tilted towards mid/small caps or thematic funds, and consider reallocating to Multi-Asset or adding gold/silver funds to bring balance.

Palve shared similar views and recommended that existing investors should continue their SIP investments and have no reason to worry about market volatility. They should also revisit their asset allocation strategy.

“Market corrections may have caused misalignment, making rebalancing necessary. Investors should assess where to redirect funds to maintain the right balance while considering the tax implications of exiting different investments,” he added.

One should always consider risk appetite, investment horizon, and goals before making any investment decisions.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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