It is important for an investor to understand that SIP is a no different form of investment than a mutual fund. It is a part of a mutual fund. It is simply a convenient method to invest in mutual funds through small investment amounts at regular intervals instead of investment in one go. Therefore, if a mutual fund scheme is likely to perform poorly, it is very likely that the SIP too may endure losses. Therefore, it is advised to apply due diligence before choosing a mutual fund scheme to invest in.