Mutual Fund–Our Way

Why Monthly SIPs Feel Broken in a Market That Changes Its Mind Daily — And the Framework I Built Instead

Here's the uncomfortable truth nobody selling SIPs wants to say out loud: the entire mathematical case for a monthly SIP rests on one assumption — that a month is a meaningful unit of market randomness. That assumption is looking shakier by the year. When volatility compresses into daily and even intraday swings, "invest on the 5th of every month" stops averaging out noise and starts becoming just another single-point bet, dressed up as discipline.

That's the problem I sat with. Here's the framework I built to test a different answer — not as advice, but as a spreadsheet experiment I ran on my own money and am now sharing the logic behind.

The Core Idea: Compress the Averaging Window

Rupee-cost averaging works because you're buying across enough distinct price points that your average entry smooths out. A monthly SIP gives you roughly 12 data points a year. My question was simple: what if I gave myself 240 instead — one for every market day?

The math I ran: if I know I want to deploy a fixed monthly amount, say ₹1,00,000, and there are roughly 20 trading days in a month, that's ₹5,000 a day. The frequency changes; the total commitment doesn't. I'm not timing anything — I'm just shrinking the interval between decisions to the smallest practical unit, which theoretically tightens the average and reduces the "bad luck of one bad date" risk that a monthly SIP is quietly exposed to.

Why I Rotated Across Funds Instead of Parking It in One

The second design choice was about where that daily ₹5,000 went. Concentrating it in a single fund reintroduces a different kind of single-point risk — fund-manager risk, house risk, style risk. So the framework I used was rotation across a basket, chosen on three criteria:

• Track record consistency rather than recent outperformance
• Diversified fund houses, so no single AMC's process or philosophy dominates the outcome
• Category spread — large-cap, multi-cap, and focused strategies represented rather than five versions of the same bet

As a mathematical illustration only — not a recommendation — my own basket during this experiment included names like a large-cap-oriented fund, a focused-equity strategy, and a couple of multi-cap/opportunities-style funds from different houses. The point isn't which funds; it's that the rotation logic forces diversification by construction, rather than by intention that quietly erodes over time.

The Operational Layer (Where Most People Give Up)

A framework only matters if it's executable, so here's the honest maintenance cost:

• I invested directly on each fund house's own platform to access Direct plans, which strips out the distributor commission that a Regular plan quietly bakes into the expense ratio year after year.
• That meant a one-time physical folio creation for each fund house, and in some cases a separate PIN-enablement form — a real friction cost worth pricing in before you commit to this structure.
• I built a tracker (a simple daily log against NAV) and used a free Moneycontrol account purely to sanity-check the aggregated view across houses, since no single platform shows a rotated multi-AMC basket cleanly.
• The rule I set for missed days: double the next day's allocation rather than skipping it, so the monthly total commitment stays intact even if the daily discipline slips.

I chose not to use the SIP feature the fund houses themselves offer, simply because it locks you into fixed dates decided by someone else — which defeats the entire premise of compressing the averaging window. If fixed-date SIPs suit your process better, the possible SIP dates for reference are laid out in the tracker.

What This Framework Is — and Isn't

This is a mental model for thinking about averaging frequency and diversification-by-rotation, illustrated with my own numbers and my own basket. It is not a suggestion that daily rotation is superior to monthly SIPs in general, nor that the specific funds named are worth holding — they're inputs into an equation, not conclusions. The higher maintenance burden is real, and whether that trade-off is worth it depends entirely on variables this post doesn't have visibility into: your cash flow, your time, your existing exposures.

(Happy to go deeper into the tracker logic and the selection scoring model in a follow-up post if there's interest.)
(Original Published on 01 Sep 2013 - Some of things have changed - Will publish new post for those things but as a concept this is still true for my investment)