A structured investment plan, often known as a SIP, is one of the two ways to invest in mutual funds. A lump sum is an additional method of investing in mutual funds. You can spread your investments over time and make small, frequent investments by investing in mutual funds through a SIP.
How Many Different Kinds of SIP Exist?
There are four SIPs: Trigger SIPs, perpetual SIPs, flexible SIPs, and top-up SIPs.
1. Top-Up SIP: As revenue rises, this enables investors to periodically raise their investment. The step-up SIP is another name for this.
2. Perpetual SIP: External SIPs are those in which the investor leaves the end date off the SIP form. The investment can always be withdrawn as needed. But to preserve financial restraint and achieve financial objectives, it is usually advisable to choose an end date for SIPs.
3. Flexible SIP: This enables the investor to alter the SIP amount and even skip a payment when money is tight. Additionally, one may increase the SIP amount while receiving a bonus or increased income.
4. Trigger SIP: SIPs of this kind are the best for novice investors. Investors can specify the NAV, index level, start date, and termination date. However, this kind of SIP fuels rumors and is frequently discouraged.
Learn: What is SIP and how to Invest in it?
Let's Understand What Mutual Funds are?
Mutual funds aggregate the funds from shareholders to invest in securities such as stocks, bonds, money market instruments, and other assets.
Professional money managers run mutual funds, allocating the assets and attempting to generate capital gains or income for the fund's investors. A mutual fund's portfolio is set up and kept up to date in accordance with the specified investment goals in the prospectus.
Small or individual investors have access to professionally managed portfolios of stocks, bonds, and other securities through mutual funds. As a result, each shareholder shares proportionately in the fund's profits or losses.
Mutual funds invest in a vast variety of assets. Performance is typically gauged by changes in the fund's overall market capitalization, obtained from the combined performance of its underlying investments.
Also Read: 10 Best Apps For Mutual Funds in India in 2024
What Does “Best SIP Funds” Mean?
A collection of carefully chosen mutual fund schemes known as “Best SIP Funds” has produced superior SIP returns than other funds in the same category.
This indicates that these Funds adhere to their investment philosophy even during challenging economic times and are unafraid of brief drops in stock prices, which enables them to produce superior long-term returns for SIP clients.
10 Best SIP Plans To Invest In India
1. Quant Active Fund
A Multi-Cap mutual fund strategy from Quant Mutual Fund is called Quant Active Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
Quant Active Fund Direct-Growth is a tiny fund in its category with 2,329 Crores in assets under management (AUM) as of June 30, 2022. The fund's expense ratio of 0.58 percent is lower than most other Multi Cap funds.
The last year's Quant Active Fund Direct-Growth returns were 7.70 percent. It has generated returns of 19.61 percent per year since its start. Every two years, the fund has quadrupled the amount invested in it.
| Expense Ratio | 0.58 % |
| Current Value | 11.29 L |
| Return (p.a) | +25.67% |
2. Quant Large and Mid Cap Fund Direct-Growth
A Large & MidCap mutual fund strategy from Quant Mutual Fund is the Quant Large and Mid Cap Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months. The fund's expense ratio of 0.56 percent is lower than that of the majority of other Large & Midcap funds.
The direct growth returns of the Quant Large and Mid Cap Fund over the past year are 11.68 percent. It has generated 17.51 percent annual returns on average since its debut. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.56 % |
| Current Value | 9.44 L |
| Return (p.a) | +18.26 % |
3. Mirae Asset Emerging Bluechip Fund
A Large & MidCap mutual fund strategy from Mirae Asset Mutual Fund is called Mirae Asset Emerging Bluechip Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
As of June 30, 2022, Mirae Asset Emerging Bluechip Fund Direct-Growth had assets under management (AUM) of 20,664 Crores, making it a medium-sized fund in its sector. The fund's expense ratio, which is lower than that of the majority of other Large & Midcap funds, is 0.7 percent.
The 1-year direct-growth returns for the Mirae Asset Emerging Bluechip Fund are 3.01 percent. It has produced returns that are, on average, 22.63 percent since its debut. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.7 % |
| Current Value | 9.41 L |
| Return (p.a) | +18.09 % |
4. Canara Robeco Emerging Equities Fund
A Large & MidCap mutual fund strategy from Canara Robeco Mutual Fund is the Canara Robeco Emerging Equities Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
Canara Robeco Emerging Equities Fund Direct-Growth is a medium-sized fund with assets under management (AUM) as of June 30, 2022, of 12 769 crores. The fund's expense ratio of 0.57 percent is lower than that of the majority of other Large & Midcap funds.
The 1-year direct growth returns for Canara Robeco Emerging Equities Fund are 3.13 percent. It has generated returns of 20.60 percent annually since its start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.57 % |
| Current Value | 8.94 L |
| Return (p.a) | +15.99 % |
5. Kotak Equity Opportunities Fund
A Large & MidCap mutual fund strategy from Kotak Mahindra Mutual Fund is the Kotak Equity Opportunities Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
With $9,223 Crores in assets under management (AUM) as of June 30, 2022, Kotak Equity Opportunities Fund Direct-Growth is a medium-sized fund in its sector. The fund's expense ratio, which is lower than that of the majority of other Large & Midcap funds, is 0.6 percent.
The 1-year Direct-Growth returns for Kotak Equity Opportunities Fund are 4.30 percent. It has produced average yearly returns of 15.72 percent since its debut. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.6 % |
| Current Value | 8.8 L |
| Return (p.a) | +15.37 % |
6. Canara Robeco Bluechip Equity Fund
A Large Cap mutual fund product from Canara Robeco Mutual Fund is the Canara Robeco Bluechip Equity Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
Canara Robeco Bluechip Equity Fund Direct-Growth is a medium-sized fund in its category with assets under management (AUM) of 6,824 Crores as of June 30, 2022. The fund's 0.34 percent cost ratio is comparable to what most other large-cap funds charge.
The 1-year returns on Canara Robeco Bluechip Equity Fund Direct-Growth are 1.94 percent. It has generated returns of 14.10 percent annually since its start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.34 % |
| Current Value | 8.75 L |
| Return (p.a) | +15.13 % |
7. SBI Focused Equity Fund
SBI Mutual Fund‘s Focused mutual fund program is called SBI Focused Equity Fund Direct Plan-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
SBI Focused Equity Fund Direct Plan-Growth is a medium-sized fund with assets under management (AUM) as of June 30, 2022, of 23,804 Crores. The fund's expense ratio of 0.69 percent is lower than that of most Focused funds.
The 1-year SBI Focused Equity Fund Direct Plan-Growth returns are 2.22 percent. It has produced average yearly returns of 15.08 percent since its start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.69 % |
| Current Value | 8.7 L |
| Return (p.a) | +14.9 % |
8. UTI Flexi Cap Fund
UTI Flexi Cap Fund Direct-Growth is a Multi-Cap mutual fund product from UTI Mutual Fund. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
UTI Flexi Cap Fund Direct-Growth is a medium-sized fund in its category with assets under management (AUM) of 22,657 Crores as of June 30, 2022. The fund's 0.95 percent cost ratio is greater than what the majority of other Multi Cap funds charge.
The 1-year returns on UTI Flexi Cap Fund Direct-Growth are -5.03 percent. It has generated returns of 14.63 percent annually on average since the start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.95 % |
| Current Value | 8.6 L |
| Return (p.a) | +14.43 % |
9. Sundaram Focused Fund
Sundaram Mutual Fund offers a focused mutual fund program called Sundaram Focused Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
Sundaram Focused Fund Direct-Growth is a medium-sized fund in its category with assets under management (AUM) of 669 Crores as of June 30, 2022. The fund's expense ratio, which stands out from most other Focused funds at 1.49 percent, is higher.
The 1-year returns on Sundaram Focused Fund Direct-Growth are -0.44%. It has generated returns of 13.77 percent annually on average since the start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 1.49 % |
| Current Value | 8.59 L |
| Return (p.a) | +14.36 % |
10. Kotak Bluechip Fund
Kotak Mahindra Mutual Fund offers a large-cap mutual fund strategy: Kotak Bluechip Fund Direct-Growth. Since it was established on January 1, 2013, this fund has been around for nine years and six months.
Kotak Bluechip Fund Direct-Growth is a medium-sized fund in its category with assets under management (AUM) as of June 30, 2022, of 4,217 Crores. The cost ratio of the fund, which is 0.78 percent, is more than what the majority of other large-cap funds charge.
The 1-year returns for Kotak Bluechip Fund Direct-Growth are 2.99 percent. It has generated returns of 13.92 percent per year since its start. Every three years, the fund has doubled the amount invested in it.
| Expense Ratio | 0.78% |
| Current Value | 8.55L |
| Return (p.a) | +14.18 % |
Benefits of the Top SIP Mutual Funds
1. The Average Cost in Rupees: The benefit of rupee cost averaging is offered by mutual fund investing. In other words, you buy fewer units while the markets are flourishing and more units when the markets are trending downward. Over time, the cost of buying your fund units averages out and falls on the lower end. Consequently, timing the markets was not necessary.
2. You Can Make a Tiny Investment: 2As was already indicated, using a SIP has eliminated the requirement that you have a lump sum available to begin your financial journey. Five hundred rupees is the customary minimum investment amount. You can invest funds in as little as Rs. 100 each month. Thus, having an investible sum is not a roadblock to beginning your mutual fund investing.
3. Flexibility: You get much-needed flexibility with SIPs. A SIP can be started or stopped at any moment, and the fund company has no control over it. You might want to temporarily halt your SIP if your finances are tight. All of these are free.
4. You Can Run Several SIPs Simultaneously: SIPs can be started and operated simultaneously into several mutual fund plans. As a result, you can gain from several mutual fund schemes at once. However, you need to use caution when investing in the recommended funds.
Refer: 10 Best Investment Plans in India
Frequently Asked Questions
Is investing With a SIP in Mutual Funds risky?
SIPs manage the risk of investing at the incorrect market time by using multiple markets. Mutual funds, however, are vulnerable to market risk. Investing in mutual funds through SIPs carries no inherent risk, but the fund that the investor selects can carry more risk than they are comfortable with.
A potential investor has a variety of funds to select from, including duration funds, balanced funds, multi-cap funds, mid-cap funds, direct plans, regular and direct growth plans, and more.
Can I Take Money Out of My SIP?
Money can always be taken out of a SIP investment plan. Redeeming the investment is what it is termed. An exit load is applied if redemption is made before a year has passed since investing.
The Best SIP Mutual Funds are For Whom?
All investors should consider making mutual fund investments through SIPs. SIPs are often suggested for novice investors.
You may get a taste of what mutual funds are capable of by investing in them through a SIP. Additionally, it would be better to begin by making mutual fund SIP investments if you are fresh in the world of equity-linked investments.
The requirement to arrange a bulk sum was eliminated by investing through a SIP. As a result, you need a minimal sum to begin your investment journey. Mutual fund options enable you to make a monthly SIP investment of as little as Rs 100. Most other investment options do not offer this option.
Is SIP Investing Better Than a Lump Sum?
You must set aside a sizable chunk of money, say Rs 40,000, to invest in a lump sum. A lump sum investment in a mutual fund plan is comparable to a deposit in a bank.
On the other hand, you do not need a sizable sum to begin investing with a SIP. You can begin your investment career with as little as Rs 100 or 1000 monthly.
You must time the markets if you want to maximize the return on your lump-sum investment.
Investments should only be made in lump sums when the markets have fallen to their lowest level and are anticipated to rebound over the next few days. Because you will eventually profit from rupee cost averaging, a SIP allows you to participate in mutual funds without waiting for the market to mature.
