SIPs and Current Returns in Different Companies

Systematic Investment Plan (SIP) is a smart way of investing in mutual funds. It is an investment plan that allows investors to invest a fixed amount of money at regular intervals (usually monthly) into a mutual fund scheme. SIP is one of the most popular and convenient investment options available to retail investors in India. In this blog, we will discuss the benefits and features of SIP and why it is a preferred investment option.

Benefits of SIP:
1. Disciplined investment: SIP helps inculcate a disciplined approach towards investing. By investing a fixed amount regularly, investors are not influenced by market volatility or emotions. It eliminates the need for timing the market and allows investors to invest systematically.

2. Long-term wealth creation: SIPs are an ideal investment option for long-term wealth creation. It allows investors to invest small amounts at regular intervals, which can accumulate into a large corpus over time. The power of compounding works in favor of investors who invest in SIPs for the long term.

3. Flexibility: SIPs offer flexibility in terms of investment amount, tenure, and investment options. Investors can start with a small investment amount and increase the amount as per their convenience. Investors can also choose the tenure of their investment and exit the scheme as per their investment goals.

4. Diversification: SIPs offer investors the opportunity to diversify their portfolio by investing in multiple mutual fund schemes. By diversifying the portfolio, investors can reduce the risk and achieve their investment goals with a higher degree of certainty.

5. Cost-effective: SIPs are a cost-effective investment option as they allow investors to invest small amounts at regular intervals. This helps investors to achieve their investment goals without incurring a huge financial burden.

Features of SIP:
1. Regular investment: SIP allows investors to invest a fixed amount of money at regular intervals, usually monthly.

2. Rupee cost averaging: Since the investment amount is fixed, the investor ends up buying more units when the market is down and fewer units when the market is up. This helps in averaging out the cost of investment.

3. Automatic debit: SIP investments can be made through automatic debit from the investor’s bank account. This eliminates the need for manual transactions, thereby making the process convenient and hassle-free.

4. Systematic approach: SIP allows investors to adopt a systematic approach towards investing. It eliminates the need for timing the market and helps in building a disciplined approach towards investing.

5. Exit options: SIP investors have the flexibility to exit the scheme as per their investment goals. The exit load and taxation on the investment depend on the tenure of the investment.
The highest interest offered by some of the companies are as follows –

In terms of small cap companies –

1. Quant Small Cap Fund -63.9% returns for 3 years period.

2. Nippon Small Cap Fund- 46.67% for 3 years period.

3. Canara Robecco Small Cap Fund -45.09%

The Mid Cap Funds returns can be described as –

1. Quant Mid Cap Funds – 41.36%

2. PGIM India Mid Cap Opportunity – 39.04%

3. SBI Magnum Mid Cap Growth- 37.41%

4.HDFC Mid Cap Opportunity – 34.35%

5. Nippon India Growth Fund – 33.78%

The Large Cap Funds returns can be shown as –

1. ICICI Prudential Bluechip fund – 25.13%

2. SBI Bluechip Direct Fund – 25.04%

3. UTI Nifty 50 Index Fund – 23.5%

4. Bandhan Nifty 50 Index Fund -23.37%

5. ICICI Prudential Nifty 50 Index Direct Fund -23.36%

The following data has been written from Groww App and these are 3 years period.

In conclusion, SIPs are a convenient and popular investment option for retail investors. It offers various benefits like disciplined investment, long-term wealth creation, flexibility, diversification, and cost-effectiveness. Investors should choose the mutual fund scheme wisely and consult a financial advisor before investing in SIPs.