SIP dissected in layman’s language
SIP – Systematic Investment Plan is a way of investment where you invest a fixed sum of money at regular intervals in the scheme of investment (Mutual Funds) you have chosen. This may sound like a traditional Recurring Deposit Scheme to many of you, but most of the SIP’s give manifold returns than the normal RD.
Benefits of investing in SIP
- Improves discipline and Convenience
Investing in SIP at regular intervals helps you to attain your financial goals over a long period and with the auto-debit feature from your account, there is no need for you to monitor it. It also offers flexibility in changing your investment amount whenever you wish. You can also quit it whenever you plan to.
- Gives a good yield on your investment
SIP generally works very well, when you stay invested in the scheme for a longer duration. The profits you earn also get re-invested to buy more units, which gives you the power of compounding. During the market fluctuations, the rupee-cost averaging method does wonders by enabling you to buy more units when the market is down and buy fewer units when the market is high.
Having known what a SIP is and the benefits you reap by investing in it, Let us look at the 5 Best SIP to invest in the financial year 2021-2022 :
- Axis Flexi Cap
This is an open-ended equity fund managed by Mr. Shreyas Devalkar and this scheme was launched on 20.11.2017. Since its inception, this scheme has given an annualised yield of 15.35% which makes it a low-risk scheme with high returns. This is best for people who want to have a decent appreciation of capital for the medium to long term.
As the name Flexi-cap suggests, less risk is involved as the fund manager has the flexibility to invest in equity and its related portfolio of various sizes for safe and maximum returns. Minimum SIP starts with Rs.500 and it can be added further in multiples of Rs.500 and in the case of lump-sum investment you can invest a minimum of Rs.5000. If you wish to exit within 1 year, you have to pay a 1% exit load only when you exit more than 10% of your investment.
- Mirae Asset Emerging Bluechip
This is another open-ended equity fund managed by Mr. Neelesh Surance since its inception on 09.07.2010 and recently Mr. Ankit Jain joined along during January 2019. The annualised return percentage stands at 21.01% since its beginning which is very good. These fund managers like to invest not only in the large-cap but also in medium-cap stocks as they believe that it gives good returns on emerging companies that have the potential to turn into a blue chip company shortly.
They follow the simple mantra of investing in companies that have a growth value and invest in it at a reasonable price. This scheme is available in both Direct and Regular plans with a Growth option or dividend option. The scheme of late has given a humongous response in terms of returns and therefore the company now has more than enough funds to handle. Therefore, they are not accepting lump sum but you can start now with SIP.
- ICICI Prudential Bluechip
This is another equity fund launched on 23.05.2008 and is headed by the trio of Mr. Anish Tawakley, Mr. Rajat Chandak, and Mr.Vaibhav Dusad as fund managers. It has given an annual SIP return of 13.88% from the start. Unlike the above two equity funds, this fund predominantly invests in large-cap stocks. Two options are available namely Growth and Dividend.
In the dividend option, you can either withdraw the dividend or purchase new units equivalent to that dividend by reinvesting in it. Minimum SIP amount starts as low as Rs.100 and can be added in multiples of Rs.100. Investing in this scheme seems fruitful when you have the patience to wait for a minimum of 5 years and it’s only indicative. They also have systematic transfer plans on a daily, weekly, monthly, and quarterly basis. In this way, you can earn more by transferring your investment to a high-performing fund from the same fund house.
- SBI Focused Equity
Generally, equity funds have to follow a rule of a minimum of 65% investment in equity and the rest 35% in debts. But as the name suggests this fund mainly focuses on equity investments and it is managed by Mr. R. Srinivasan since 2009 even though this fund got launched on 11.10.2004. They have given an annualised return of 19.38% on the investment since its inception.
They invest in different sectors and market capitalization and employ the bottom-up approach when it comes to the selection of stocks. For higher efficiency and effective monitoring, they invest in around 30 stocks to the maximum and manage them. They offer a minimum lumpsum investment of Rs.5000 and in multiples of Rs.1000 can be added further during the tenure of the investment and you can exit whenever you wish, but there is an obligation to pay 1% exit load if it is within 12 months from the date of allotment.
- DSP Midcap
This fund was launched on 14.11.2006 and it is now being managed by Mr.Vinit Sambre, Mr.Resham Jain, and Mr. Jay Kothari. As the name says, these fund managers invest predominantly in Mid-cap stocks which have a good potential to grow and buy when they are traded at discounted rates and therefore start now to multiply your idle money in the bank. Since its launch, they have given an annualised yield of 15.06%. Unlike other funds, there is no difference between both the lump sum and SIP and they both start at Rs.500 and additions can be made in multiples of Rs.500. Invest in this fund, if your goal is a capital appreciation for a long-term duration.
If you’re willing to invest and want a professional advisor who will be able to maintain as well as grow your portfolio, contact www.swaritinvestment.com for better selection of plans which satisfy your needs.