Frequently Asked Questions
Quick answers about historical Mutual Fund SIP backtesting.
What is a Mutual Fund SIP backtester?
A Mutual Fund SIP backtester is a free tool that calculates the historical returns of a Systematic Investment Plan (SIP) in specific Indian Mutual Funds using actual past NAV data. It simulates investing a fixed amount every month to find your true XIRR and profit.
How do I backtest Parag Parikh Flexi Cap or Quant Small Cap?
Simply type the name of the mutual fund in the search box above. Select the fund from the dropdown, choose your monthly SIP amount and duration, and click Run Backtest. The tool will calculate your total invested amount, current value, and real XIRR.
What is XIRR and how is it different from absolute returns?
XIRR (Extended Internal Rate of Return) is the most accurate way to measure SIP returns because it accounts for the timing of each investment. Absolute return just shows total profit as a percentage of total invested — it ignores when you invested. CAGR assumes a single lumpsum. XIRR is the only metric that correctly handles monthly SIPs made over years, which is why this backtester uses XIRR as the primary return metric.
Which mutual fund SIP date gives the best returns?
Research and backtesting consistently shows that SIP date has minimal impact on long-term returns — the difference between investing on the 1st versus the 28th is typically less than 0.1% XIRR over a 10-year period. What matters far more is staying invested consistently. You can backtest any SIP date using this tool by selecting your preferred date before running the backtest.
How accurate is this backtester? Where does the data come from?
This backtester uses real historical NAV data fetched directly from mfapi.in, which sources its data from AMFI (Association of Mutual Funds in India) — the official regulatory body. NAV data is accurate to the actual trading day. The XIRR calculation uses each SIP installment's exact purchase date and NAV, making the results as close to real-world performance as mathematically possible.
What is a good XIRR for a mutual fund SIP in India?
For Indian equity mutual funds, a good XIRR over a 10-year SIP period is generally 12–18%. Large-cap funds have historically delivered 11–14% XIRR, flexi-cap funds 13–17%, and small-cap funds 15–20% (with higher volatility). An XIRR below 10% over 10 years would underperform a simple index fund. Use this backtester to compare actual XIRR across different fund categories.
How does SIP during a market crash (2020, 2008) affect returns?
Market crashes are actually beneficial for SIP investors due to rupee cost averaging — you buy more units when prices are low. Investors who continued SIPs through the 2020 COVID crash saw significantly higher long-term XIRR because they accumulated more units at depressed NAVs. Use the Portfolio Journey filter in this tool to isolate specific years like 2020 or 2008 and see exactly how your fund performed during those periods.
What is rupee cost averaging and does backtesting prove it works?
Rupee cost averaging means that a fixed monthly SIP automatically buys more units when NAV is low and fewer units when NAV is high. This lowers your average cost per unit over time. Backtesting proves it works — investors who ran consistent SIPs through the 2008 financial crisis, 2015 correction, and 2020 COVID crash all saw their XIRR improve over investors who paused SIPs during those periods.
Is past SIP performance a guarantee of future returns?
No. Past performance is not a guarantee of future returns — this is a regulatory requirement that all mutual fund products must disclose. Historical backtesting is valuable for understanding how a fund behaved through different market cycles, volatility, and drawdowns. It helps you make more informed decisions, but markets are unpredictable. Use this tool as an educational and analytical tool, not as a prediction of what your investment will return.
How is this backtester different from a regular SIP calculator?
A regular SIP calculator assumes a flat annual return (e.g. 12%) and applies it uniformly — it has no knowledge of actual market history. This backtester uses real historical NAV data from AMFI for the specific mutual fund you choose. It simulates actual monthly purchases at real NAV prices, calculates your true XIRR, and shows how your portfolio would have looked year by year — including during crashes and bull runs.
What is maximum drawdown and why does it matter for SIP investors?
Maximum drawdown is the largest peak-to-trough decline in portfolio value during a given period. For SIP investors, drawdown matters because it tests your ability to stay invested. A fund with a 50% maximum drawdown (like many small-cap funds in 2008) requires 100% recovery just to break even. Understanding historical drawdown helps you choose funds that match your risk tolerance and avoid panic-selling during corrections.
What is the difference between CAGR and XIRR for mutual funds?
CAGR (Compound Annual Growth Rate) measures the growth of a single lumpsum investment from start to end. It does not account for multiple investments at different times. XIRR is designed for SIPs — it calculates the internal rate of return considering each monthly installment's timing and amount. For SIP performance, XIRR is always the correct metric. CAGR is used to benchmark the fund's NAV growth independently of your investment pattern.
What is the 15×15×15 rule in SIP?
The 15×15×15 rule states that if you invest ₹15,000 per month for 15 years at an assumed 15% annual return, you accumulate approximately ₹1 crore — illustrating the power of compounding in equity mutual funds. It is a useful rule of thumb, but it assumes a flat 15% CAGR which no real fund delivers smoothly every year. Use this backtester with actual historical NAV data to see what ₹15,000/month would have genuinely produced in your chosen fund over any 15-year window.
