### SIP Calculation confusion

POSTED BY ON November 1, 2011 11:09 pm COMMENTS (6)

I was just going thru Moneycontrol SIP calculator for a particular fund and I end up in confusion.
Confusion is in ‘returns’ if I use Moneycontrol SIP calc for SBI Magnum TAX G fund it shows 10.5% annualized returns. However if I see returns on performance sheet for 3yrs it shows 20.6%.?? So now question is which is relevant in SIP returns calculations. for instance if I use jagoinvestor SIP calculator then I should enter 20% or 10% returns?

For better understanding I have put together couple of screenshots.
MoneyControl SIP calculator for SBI Magnum Tax Gain 3yrs returns 10.05%
http://img1.imagehousing.com/48/f82d6fac28335e4e9f60e0460c1c0be9.png

Moneycontrol 3yrs Returns showing 20.6% and valueresearchonline also shows 20.6% returns(annualized)

Links of Moneycontrol SBI Magnum Tax Gain fund and SIP calculator
http://www.moneycontrol.com/mutual-funds/nav/sbimagnumtaxgainschemeg/MSB093

Valuerearchonline link for SBI Magnum Tax Gain Fund
http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=198

Jagoinvestor SIP Calculator
https://www.jagoinvestor.com/calculators/html/SIP-Calculator.html

p.s. I have checked couple of other funds as well and there is huge discrepancy.

1. marshaln says:

ya i agree it will be a complicated for publishers to show such data..however they should mention that it is a lumpsum returns.. SIP returns varies 🙂

2. marshaln says:

Thanks @zionview for clarification.. i was under assumptions that returns shown on valueresearchonline or moneycontrol are sip returns, but its not. SIP returns are way different from lumpsum. :(.as you can see in current example sip are just half of lumpsum.

1. TheZionView says:

You assumed wrong 🙂 .If they show all returns in SIP then they need not have SIP Calculator in place. Also Calculating for lumpsum is good way of showing since SIP will defer with various parameter changes for example i can choose my SIP to start on 5th of month instead of 1st. Also i could consider Daily or Weekly or Fortnight or Monthly or Quarterly SIPs. All of these will show difference in returns.

So its best to keep Lumpsum returns and if investor needs to know which kind of SIP they need they can use their calculators 🙂

3. TheZionView says:

The Returns shown is fine

Its simple,the SIP return is different from lumpsum return.

The 3 Year return that is shown is for if you had invested lumpsum invested 3 years before then you would have 20% CAGR. Instead if it was SIP(which is regular investment month after month) then the return is 10.5% CAGR.

4. marshaln says:

@abhishek, i just checked valueresearchonline sip calculator for SBI magnum fund tax gain G and its showing 10% annualized SIP returns, but on performance sheet of valueresearchonline it shows 20%.. so confusion still there..

http://www.valueresearchonline.com/learning/h2_CalcSIPReturn.asp?amc=25&select5=18&scheme=198&stmonth=10&styear=2008&endmonth=10&endyear=2011

5. Abhishek says:

Hi

Use the Valueresearchonline SIP calculator. It should give the correct results. The Older Factsheets also can give you enough idea.

Regards
Abhishek

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