Systematic Investment Plans (SIPs) have become the face of India’s mutual fund revolution. The campaigns are everywhere — billboards, TV ads, social media reels — each telling heartwarming stories of ordinary people who became “crorepatis” through disciplined SIP investing.
But beneath these narratives lies an uncomfortable truth: SIP success stories are cherry-picked. The industry carefully selects only the most flattering examples, while ignoring the countless investors whose SIPs underperformed, failed to meet goals, or were abandoned mid-way.
This selective storytelling creates a distorted picture of reality, convincing millions that SIPs are almost foolproof. In this article, we examine why SIP success stories are cherry-picked, how the practice works, and the hidden costs for investors who believe them.
The Nature of Cherry-Picking
Cherry-picking in finance means highlighting only favorable outcomes while ignoring unfavorable ones. In the SIP context, it involves:
- Choosing periods of high market returns.
- Highlighting categories (like small-caps) only when they outperform.
- Selecting investors who stayed invested through long cycles, while ignoring those who quit midway.
- Publishing examples that match the “crorepati” dream while suppressing cautionary tales.
How SIP Success Stories Are Constructed
1. The Perfect Start Date
AMC ads often show a 15-year SIP compounding into crores. But the calculation begins after a market crash, when valuations were low. Starting in overheated markets would have produced weaker results.
2. Ignoring Stoppages
Data assumes SIPs ran uninterrupted for decades. In reality, many investors stop SIPs after a few years due to job changes, financial stress, or disappointment.
3. Best-Performing Funds Only
Success stories highlight top quartile funds. Underperforming funds with similar SIPs are ignored.
4. Excluding Costs and Taxes
Projections rarely mention expense ratios, exit loads, or taxation — all of which cut final returns.
5. Inflation Blindness
A ₹1 crore SIP corpus sounds huge, but after 15–20 years of inflation, its real purchasing power may be much smaller.
6. Visual Manipulation
Charts use smooth upward curves, minimizing the sharp drawdowns that test real investor discipline.
Why AMCs Cherry-Pick
- Marketing Simplicity
Investors don’t like complexity. Cherry-picked examples create simple, inspiring stories. - Asset Growth Pressure
AMCs thrive on inflows. Positive stories encourage more SIP sign-ups. - Distributor Incentives
Relationship managers use cherry-picked data to close sales quickly. - Avoiding Panic
Highlighting negative outcomes may discourage investors altogether, so only positives are promoted.
Investor Psychology and Cherry-Picked Stories
Authority Bias
When respected AMCs show cherry-picked data, investors assume it must be universally true.
Anchoring
Investors anchor on big corpus numbers like ₹1 crore, ignoring underlying assumptions.
Optimism Bias
People believe they’ll be among the success stories, not the failures.
Herd Mentality
When “millions” are shown succeeding with SIPs, investors feel compelled to join.
Case Studies
Case 1: The 2008 Illusion
AMCs highlighted SIPs starting in 2003–2007 that grew massively by 2008. But investors who started in 2007 and faced the crash saw years of negative or flat returns, which were omitted from brochures.
Case 2: The Mid-Cap Mirage
Between 2014–2017, mid-cap SIPs showed spectacular growth. AMCs highlighted these cases. When mid-caps crashed in 2018–19, those investors were nowhere in the “success” stories.
Case 3: The Pandemic Cherry-Pick
Post-COVID 2020, SIP stories focused on those who kept investing through the crash and doubled wealth in 2021. Investors who redeemed in panic — a majority — were excluded.
The Human Cost
- False Expectations
Investors expect smooth, high returns, only to be shocked by volatility. - Overcommitment
Believing in guaranteed success, some commit more than they can afford, leading to panic exits. - Goal Shortfalls
Families planning education or retirement around cherry-picked projections may find themselves short. - Trust Erosion
When reality diverges from success stories, investors lose trust in the entire mutual fund ecosystem.
Global Parallels
- U.S. Mutual Funds: Ads show best 10-year performers, ignoring the majority that underperform the index.
- UK Unit Trusts: 1990s marketing highlighted winners while most funds lagged.
- Asia ULIPs: Sold with cherry-picked projections of rare high performers.
Across the globe, cherry-picking is a classic financial marketing tactic.
Warning Signs of Cherry-Picked SIP Stories
- Examples starting right after market crashes.
- Smooth upward charts with no volatility.
- Use of phrases like “crorepati guaranteed” or “always positive after X years.”
- No mention of fund categories that underperformed.
- Case studies of individuals that sound too perfect.
What Regulators Should Do
- Mandate Rolling Returns Disclosure
AMCs should show SIP outcomes across all rolling periods, not just select ones. - Highlight Worst-Case Scenarios
Ads should disclose maximum drawdowns and periods of loss. - Ban Misleading Comparisons
SIPs should not be equated with FDs or portrayed as risk-free. - Independent Auditing
Success stories should be verified by independent auditors before use in marketing.
How Investors Can Protect Themselves
- Check Rolling Return Data
Look at SIP outcomes across all 5-, 10-, 15-year windows, not just averages. - Benchmark Comparison
See how your SIP fund performs against index funds. - Question Projections
Always ask: “What if markets don’t repeat this history?” - Plan for Inflation
Factor in purchasing power erosion when calculating long-term corpus. - Diversify Goals
Don’t rely solely on SIPs; mix with debt, deposits, and insurance.
Could Cherry-Picking Backfire?
Yes. If too many investors experience results far below the rosy stories they were sold, disillusionment could spark mass redemptions. This would not only hurt AMCs but could undermine the credibility of SIPs as a concept.
Conclusion
SIP success stories are not lies, but they are incomplete truths. They highlight only the best outcomes while ignoring the inconvenient reality of underperformance, volatility, and investor behavior.
By cherry-picking stories, the industry sells inspiration but not education. For SIPs to truly serve investors, transparency must replace marketing — showing the good, the bad, and the ugly.
Until then, investors must remember: if the story sounds too smooth, it’s probably cherry-picked.
ALSO READ: The Municipal Bond Ponzi Scheme Exposed
