How the SIP Backtest Works
A SIP backtest shows what would have happened if you had started a monthly SIP in a chosen mutual fund on a chosen date. We invest your chosen amount every month on the same date as your start date (on the next available NAV if that day was a holiday), add up the units you would have bought, and value them at the latest published NAV.
You see total invested, current value, profit or loss and the annualised return, XIRR. We also tell you whether the portfolio ever dipped below the money you had put in, and by how much at the worst point – a useful way to judge how the ride felt, not only where it ended.
What is used, and what is left out
- Data: the daily NAV history of the scheme, as published by AMFI. Choose the Growth option of the fund; IDCW (dividend) options are hidden from the search because payouts make their NAV misleading for a backtest.
- Instalment date: same day each month as the start date. If a month is shorter than that day, the last day of the month is used.
- Not included: stamp duty, exit load, taxes, and changes in the fund's expense ratio over time (the NAV already has expenses deducted).
- A fund younger than your start date: the backtest begins on the fund's first NAV and tells you so.
Terms and Definitions
NAV – Net Asset Value, the price of one unit of a mutual fund on a given day. Example: ₹48.26.
SIP – Systematic Investment Plan: a fixed amount invested at regular intervals, here every month. Example: ₹5,000 a month.
Units – what each instalment buys: the amount divided by that day's NAV. Example: ₹5,000 at a NAV of ₹25 buys 200 units.
XIRR – the annualised return that accounts for the dates of every instalment, so money invested later counts for a shorter time. It is the right measure for a SIP; a simple percentage gain is not. Example: 18.38% a year.
Absolute return – profit as a percentage of the total amount invested, ignoring how long it took. Example: 58.22%.
Max Drawdown (since SIP start) – the biggest fall of the fund's NAV from a high point to a later low point, measured from the day of your first instalment to the last NAV date. It takes the highest NAV reached so far (the peak), finds the lowest NAV after it (the low) and reports the fall between the two as a percentage, with both dates. It is a property of the fund's price, so it does not depend on how much you invest, and it is not the same as the Max Dipped below capital figure in the summary, which compares the value of your units with the money you had put in up to each day. Example: after your SIP starts the NAV rises to ₹100, falls to ₹70, climbs to ₹120 and later dips to ₹96. The falls are 30% (100 to 70) and 20% (120 to 96), so the Max Drawdown is −30%.
Max Dipped below capital – whether, on any day, the value of your units was lower than the total you had invested up to then, and the largest such shortfall, shown in rupees and as a percentage of the amount invested till that day. Example: if you had put in ₹3,00,000 and on one day your units were worth ₹2,55,000, the dip is ₹45,000, or 15%.
Wealth multiplier – current value divided by total invested. Example: 1.58× means every ₹1 invested is now worth about ₹1.58.
Average AUM (AAUM) – the average value of all the money a scheme managed during a quarter, in crore rupees (Cr), as published by AMFI. It adds up all plans of the scheme (Direct, Regular, Growth, IDCW) and is shown with the quarter it covers, so it can be a few months old. Example: ₹1,10,925 Cr.
Nawneet Kumar Panjiyar is an AMFI Registered Mutual Fund Distributor (ARN 303470) and does not provide investment advisory services in the capacity of a Registered Investment Adviser. This tool is for education and illustration only.
