1 week ago
Nifty 50 Data Compares Lumpsum Investing With Six-Month STP
Imagine you have a large amount of money and want to invest it in the Nifty 50.
You can invest everything on one day, called lumpsum investing.
Or, you can put the money in gradually over six months through an STP.
The study found that lumpsum investing generally earned slightly more over one to seven years.
The biggest difference was seen after one year.
However, the difference became very small when the money stayed invested for 10 years or more.
Over 20 and 25 years, both methods had the same average annualised returns in the study.
The month when investing began could make a big difference in shorter periods.
This means the choice matters more in the short and medium term than over very long periods.
FundsIndia’s analysis of Nifty 50 TRI data covered market cycles from 2000 to 2025.
Lumpsum investing produced higher or equal average annualised returns than six-month STP across one- to seven-year periods.
The largest average return gap was three percentage points over one year.
Average returns for both approaches converged over longer periods, reaching the same levels at 10, 12, 15, 20 and 25 years.
The start date still mattered: January 2008 produced a negative one-year STP return, while January 2009 produced a strongly positive result.
- Who
- Investors with a large investible corpus, as examined by FundsIndia.
- What
- A comparison of investing all at once with deploying money through a six-month STP.
- Where
- The comparison concerns the Nifty 50 market.
- When
- The analysis used Nifty 50 TRI data from 2000 to 2025.
- Why
- To assess how the timing and pace of investing affect returns across different holding periods.
Lumpsum Investing
Six-Month STP
Short- and medium-term returns
Lumpsum Investing
Lumpsum investing had a modest average return advantage across one-, three-, five- and seven-year periods.
Six-Month STP
Six-month STP produced slightly lower average returns over those periods, although the difference narrowed after the first year.
Long-term outcomes
Lumpsum Investing
Lumpsum returns were equal to STP returns at several longer horizons, including 10, 12, 15, 20 and 25 years.
Six-Month STP
STP matched lumpsum average returns at those same longer horizons in the analysis.
Effect of the starting date
Lumpsum Investing
Investing the full amount at once makes the initial market-entry date especially important for the investment’s early performance.
Six-Month STP
STP spreads the money’s entry across six months, but its results also varied depending on when the STP began.
Key facts
- Data source
- FundsIndia Research, using Ace MF data.
- Market index
- Nifty 50 TRI.
- Data period
- 2000-2025.
- One-year averages
- Lumpsum: 16%; six-month STP: 13%.
- Seven-year averages
- Lumpsum: 15%; six-month STP: 14%.
- Ten- to 15-year averages
- Both approaches averaged 14%.
- 20- and 25-year averages
- Both approaches averaged 15% over 20 years and 14% over 25 years.
Sources
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