Silver has shown tremendous momentum over the past one year. Until July 2026, silver delivered a return of 98% in one year. But the average investor’s money-weighted return remained at only 18%. This difference is clearly visible in the September 2026 Netra report of DSP Mutual Fund. According to the report, FOMO, or Fear of Missing Out, motivated investors to invest even in the right asset at the wrong time, due to which their returns remained considerably lower.
Let us understand in detail how this gap was created.
Silver’s Rally and Investors’ Return
According to DSP’s report, silver’s market return was 98% in one year, while the money-weighted return of the average investor investing in silver ETFs was only 18%. Money-weighted return shows how much money the investor invested and when it was invested. Of the money invested in silver ETFs in the last 12 months, 56% of the amount was in loss as of 31 July 2026.
In January 2026, a record net inflow of Rs 11,761 crore came into silver ETFs. This was the largest inflow in a single month so far. This money came in around the monthly price peak. The January inflow was almost equal to the total cumulative inflow from September 2024 to August 2025, when silver’s price was below Rs 1.41 lakh per kg.
FOMO Made People Invest at the Wrong Time
The main message of the report is that FOMO does not take investors into the wrong asset, but makes them invest in the right asset even when a large part of its rally has already happened. ‘FOMO converts past returns into future expectations’ – that is, investors start treating past returns as expectations of future returns.
As silver’s price rose, investors’ demand also kept increasing. The higher the price went, the more money came into the asset. Seeing the high returns, investors started hoping that the rally would continue further.
As a result, instead of buying at lower prices, investors put more money in after the rally. This is why the market’s return and the investor’s actual return became different.
Pattern of Inflows and Losses
The record inflow of January 2026 is a clear example of this. At that time, silver had already risen considerably and investors’ demand was increasing along with the rally. The fact that 56% of the capital was in loss does not mean that silver overall gave a loss. It means that many investors put money at different high levels during the rally, and their purchase price remained higher than later price levels.
If an investor had invested before the rally started, they could have benefited from the entire surge. But for those who invested at high levels, the return remained low. This is why the market return of any asset and the actual return of the investor are not always the same.
The Same Pattern Was Seen in Other Categories as Well
In the DSP report, a similar difference is visible in other volatile categories as well.
Fund return and investor return are not two sides of the same coin. The figures show how much the growth that appears on paper diminishes by the time it reaches the investor.
Between 2013 and 2020, small-cap funds gave an average return of 14.8% every year. But the experience of the common investor remained far from this, with their annual return at negative 1.6%. The gap of 16.4 points between the two was created because investors invested at the wrong time. Until December 2017, only Rs 17,000 crore came in over seven years, and in the next two and a half years (January 2018–June 2020), a sudden inflow of Rs 27,000 crore occurred.
The story of infra funds is even more surprising. This category, which gave a return of 33.8% annually in 2004-09, gave investors only a 6.2% return. The reason? Three-fourths of the total investment came in one year, from March 2007 to March 2008, that is, right around the peak, before the rally ended.
Not only this, in the last seven years (2019–2026), the 17% CAGR return of tech funds turned into 7.6% for investors. In momentum funds, the situation was even worse because against the fund return of 15.1% from 2021 to 2026, the investor received only 3.2%.
The lesson is only one: in making money, the investor’s timing and patience matter more than the fund’s capability.
What Lesson Does Investor Behavior Give?
The reported return of a fund is based on NAV and shows the performance of the portfolio. On the other hand, investor return also includes when the money was invested and when it was withdrawn. This difference is seen more in categories where returns are volatile and lumpy. Investors often pay more attention to one-year returns, and good recent performance turns into higher flows.
According to Moneycontrol, Ganesh Mohan of Bajaj AMC, citing Morningstar data, said that investors earn 2.5 to 5% less than the fund return over three-, five- and ten-year periods.
Systematic investing can reduce the risk of getting the entry point wrong, but SIPs do not completely eliminate behavioural risk. Regular investment gives more units at lower prices and fewer units at higher prices. The big challenge is to continue the strategy even when an uncomfortable situation arises in the market.
This example of silver shows that investing in a hurry just by looking at past returns can considerably reduce actual earnings. The market’s return and the investor’s return can be different because the timing of investment is also equally important.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
