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Best SIP Mutual Funds

An SIP (Systematic Investment Plan) is a smart, hassle-free method of investing a fixed sum in a mutual fund scheme. It permits one to purchase units on a particular date every month in order to implement a saving plan. One can invest a particular prearranged amount at regular intervals that are chosen beforehand (quarterly, monthly, weekly, etc.). One of the biggest advantages of this plan is that it inculcates the habit of saving in the user so that they can start to build a respectable fund for the future.

The saying ‘the early bird catches the worm’ holds true for an SIP, as you can benefit greatly from starting early. An important aspect of an SIP is the fact that maintaining it is hassle-free; your money will be auto-debited from your bank account each month and will also be invested into a mutual fund scheme of your choice. When you go for an SIP for your investing needs, there is no need to time the market. There is also a disciplined approach to investments. What’s more, you can take advantage of two powerful investment strategies: Power of Compounding and Rupee Cost Averaging.

Best Performing SIP Mutual Funds

Based on the above criteria, we have made a list of the best performing mutual funds that can be invested through an SIP in different categories of large-cap, small-cap, multi-cap, and equity-linked saving schemes.

Large-Cap Schemes

Schemes that invest in firms with a market capitalisation of over Rs.20,000 crore are known as large-cap schemes. They are ideal for investors who wish to accumulate wealth without exposing their investments to a volatile market. Below are the top performing large-cap schemes:

Scheme Name 5-Year Monthly SIP 10-Year Monthly SIP
Present Value of Rs.6 lakh Invested XIRR Present Value of Rs.12 lakh Invested XIRR
Aditya Birla SL India GenNext Fund (G) Rs.10,48,446 22.95% Rs.35,27,792 20.63%
Aditya Birla SL Top 100 Fund (G) Rs.9,43,785 18.53% Rs.28,56,912 16.69%
ICICI Pru Dynamic Plan (G) Rs.9,46,152 18.64% Rs.28,57,413 16.69%
ICICI Pru Top 100 Fund (G) Rs.9,41,591 18.43% Rs.27,57,958 16.02%
Quantum LT Equity Fund (G) – Direct Plan Rs.9,15,695 17.27% Rs.28,82,955 16.86%
Reliance Growth Fund (G) Rs.10,75,057 24.01% Rs.30,73,348 18.05%
SBI BlueChip Fund – Reg (G) Rs.9,55,955 19.07% Rs.28,57,343 16.86%
Tata Equity P/E Fund (G) Rs.11,49578 26.86% Rs.34,73,254 20.34%
Templeton India Growth Fund (D) Rs.10,16,220 21.63% Rs.28,65,778 16.74%

Mid-Cap Schemes

Mid-cap schemes invest in companies that have a market capitalisation ranging between Rs.500 crore to Rs.10,000 crore. Investors with high risk appetite and wanting to grow their investments at a fast pace should invest in these kinds of schemes. Below are the best performing funds in this segment:

Scheme Name 5-Year Monthly SIP 10-Year Monthly SIP
Present Value of Rs.6 lakh Invested XIRR Present Value of Rs.12 lakh Invested XIRR
Aditya Birla SL Small & Midcap Fund (G) Rs.13,23,508 32.92% Rs.42,18,830 23.96%
Canara Rob Emerg Equities Fund – Reg (G) Rs.13,14,645 32.63% Rs.48,38,179 26.51%
Edelweiss Mid and Small Cap Fund – Reg (G) Rs.12,64,097 30.93% Rs.42,94,253 24.29%
Franklin India Smaller Cos Fund (G) Rs.12,77,332 31.38% Rs.47,29,377 26.09%
L&T Midcap Fund – Reg (G) Rs.13,37,343 33.37% Rs.43,89,015 24.70%
Sundaram Select Midcap (G) Rs.12,11,517 29.10% Rs.41,04,930 23.45%

Multi-Cap Schemes

This type of scheme invests in stocks of large, mid, and small companies and are ideal for investors with low risk appetite. Below are the top performing schemes in this category:

Scheme Name 5-Year Monthly SIP 10-Year Monthly SIP
Present Value of Rs.6 lakh Invested XIRR Present Value of Rs.12 lakh Invested XIRR
Aditya Birla SL Advantage Fund (D) Rs.10,86,635 24.46% Rs.31,54,786 18.54%
Aditya Birla SL Equities Fund (G) Rs.10,62,428 23.51% Rs.31,32,942 18.41%
DSPBR Opportunities Fund – Reg (G) Rs.10,59,532 23.39% Rs.31,22,204 18.35%
Franklin India High Growth Cos Fund (G) Rs.10,62,666 23.52% Rs.35,15,164 20.56%
HDFC Capital Builder Fund (G) Rs.10,47,417 22.91% Rs.32,39287 19.03%
IDFC Premier Equity Fund – Reg (G) Rs.10,04,444 21.12% Rs.34,70,007 20.32%
Kotak Opportunities Fund (G) Rs.10,01,061 21.00% Rs.28,94,647 16.93%
L&T India Spl. Situations Fund – Reg (G) Rs.10,29,111 22.16% Rs.31,77,810 18.68%
Principal Growth Fund (G) Rs.11,13,167 25.49% Rs.31,94,146 18.77%
Reliance Reg Savings Fund – Equity Option (G) Rs.10,44,421 22.78% Rs.30,31,976 17.80%
Reliance Top 200 Fund (G) Rs.9,86,966 20.40% Rs.28,70,308 16.77%
SBI Emerging Business Fund – Reg (G) Rs.10,47,848 22.92% Rs.37,02,130 21.53%
SBI Magnum Multicap Fund – Reg (G) Rs.1060,999 23.45% Rs.29,99,412 17.60%
SBI Magnum Multiplier Fund – Reg (D) Rs.10,31,727 22.27% Rs.30,93,165 18.17%
Sundaram Rural India Fund (G) Rs.11,39,195 26.47% Rs.32,79,043 19.26%

Equity-Linked Savings Schemes

Equity-Linked Savings Schemes is an equity-centric mutual fund that can help the investor save tax as well as build wealth. The top performing funds in this category are given below:

Scheme Name 5-Year SIP 10-Year SIP
Present Value of Rs.6 lakh Invested XIRR Present Value of Rs.12 lakh Invested XIRR
Aditya Birla SL Tax Plan (D) Rs.10,60,921 23.45% Rs.31,52,856 18.53%
Aditya Birla SL Tax Relief ’96 (ELSS U/S 80C of IT Act) (D) Rs.10,78,500 24.14% Rs.31,92,955 18.77%
DSPBR Tax Saver Fund – Reg (G) Rs.10,47,913 22.93% Rs.32,18,953 18.92%
Invesco India Tax Plan (G) Rs.10,10,072 21.38% Rs.32,03,378 18.83%
L&T Tax Advt Fund – Reg (G) Rs.10,56,510 23.27% Rs.31,65,438 18.60%
Reliance Tax Saver (ELSS) Fund (G) Rs.11,18,452 25.69% Rs.36,32,707 21.17%
Tata India Tax Savings Fund – Reg (DP) Rs.10,82,096 24.28% Rs.32,57,362 19.14%

Why should you invest in an SIP?

Did You Know?

"As of August 2017, ICICI Prudential Mutual Fund is the fund with the most amount of money under management with an AUM of Rs.227,989 crore."
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One of the prime reasons why you should invest in an SIP is because it brings a sense of discipline in your investments and cultivates regular saving habits. Saving small and regularly is the philosophy that an SIP revolves around. It enables the investor to build wealth over a long-term. Besides this, an SIP offers many other benefits. We’ve listed the most important ones, below:

  • Rupee Cost Averaging - SIPs can aid in averaging the cost return ratio. The equity market being volatile in nature will enable the investor to purchase more units when the price of shares are low and lesser units when the shares are priced higher. SIPs give regular investors the chance to garner more shares at low prices than investors who invest a large sum of money at once.
  • Power of Compounding - According to the principle of compound interest, any small amount of money when invested for a longer period of time can get compounded and fetch you good returns. As a result, the investor will be able to accumulate a large corpus and achieve long-term financial goals by investing small but at regular intervals.
  • Is not heavy on the wallet - Investment made through an SIP can be as low as Rs.500. Such a low amount will not burden your budget and over a period of time, this amount will grow to fetch you substantial returns.
  • Automated Payments - Even if you are someone who is regular when it comes to making investments, you may sometimes miss out on making the payments. An SIP eliminates this by automating the payments which means that every month, a predetermined amount will automatically be deducted from your bank account. So, there is no way that you would miss out on making the payments.
  • Funds can be used for emergencies - An SIP offers a one-click withdrawal option where you can withdraw the amount anytime you want. This fund can be used to meet any contingencies such as job loss, accidents, illnesses, etc.
  • Eliminates the need for timing the market - Since SIPs are regular investments, you do not have to worry about if the market is performing good or bad. Over time, even if there have been highs and lows, the performance of the fund will even out. This will ensure that irrespective of the market volatility, you will be able to enjoy good returns.

How to achieve more with SIP?

To derive maximum benefits from an SIP, ensure that you do the following:

  • Make a list of your goals and calculate the amount of saving you need to do to achieve your goals.
  • Determine how much amount you wish to invest monthly/quarterly through SIP in order to fulfill your goals.
  • Research the mutual fund market and check which funds have performed well over the past years. Once you have done that, you will be able to figure out which plan to invest in through an SIP.
  • All mutual fund investments require investors to complete the KYC documentation process along with other formalities like submission of cheques and forms. Complete the process and start investing.
  • To reap good returns on your investments, choose a plan on a long-term basis.
  • You can invest in multiple SIPs to diversify your investments and optimise the returns.

How to choose the best mutual fund to SIP?

With more than 5,500 mutual fund schemes available in India, choosing the right one to invest through an SIP is no easy task. The equity category alone has around 300 schemes and there are other categories such as debt and gold. Though finding the right mutual fund is not easy, below are some pointers that can help you navigate through the various options and choose the ideal one.

  • Objective of investment - All investments have an objective. It could be for buying a house, saving up for a marriage, going for a vacation, children’s education, etc. Depending on the goal, the investment can be for short-term or long-term. If you are saving for your children’s education or for your retirement, it will be a long-term goal but if you are saving up for buying a car, for example, it will be a short-term goal. If you’re looking at achieving your long-term goal, investing in equity funds can be a good option. For achieving short-term goals, you can invest in debt funds and money market funds. Before investing, ensure that you assess your objectives and align it with your risk appetite.
  • Knowledge about the fund house - The fund house is responsible for managing your money and you expect them to take care of your investments. While choosing a fund house, see to it that you have thorough knowledge about them because they are the ones who will take investment decisions on your behalf. Research about the fund house before investing through them by asking relevant questions like how many schemes they offer, what is the approach they follow while investing, does it offer innovative products, etc.
  • Performance of the fund - Fetching good returns is the ultimate objective of any investor. Therefore, before investing it is imperative that you research about the returns the fund has given over different periods and make a comparison of it with the benchmark index. You can find the information about how a fund has performed by doing a web search.
  • Expense ratios and loads - Though these costs are relatively small, they can make a huge difference in the returns when considered for a long term. Look for funds that are without or lower load prices and with low expense ratios. The information about load and expense ratios can be found in the scheme documents or fund fact sheets.
  • Experience of the fund manager - Apart from knowing about the fund house, it is also important that you do some research about the fund manager. Analyse how funds managed by him/her have performed especially when the markets encountered hard times. A good fund manager will manage your investments efficiently to help you achieve greater returns and hence, it is vital that the fund manager has expertise in a wide variety of investment categories.

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GST rate of 18% applicable for all financial services effective July 1, 2017.

News About Best SIP Mutual Funds

  • Investors oversubscribed CPSE ETF anchor portion 5.57 times

    Reliance Central Public Sector Enterprises - Exchange Traded Fund has become a big attraction for the investors with its anchor portion oversubscribed 5.57 times. As a matter of fact, Rs.2,400 crore of subscription was received against the book size of Rs.2400 crore. Out of the total subscription done by mutual fund companies, insurance, and retirement funds, and foreign portfolio investors (FPI), 65% subscription came from FPIs only. As a matter of fact, CPSE ETF which functions like a mutual fund scheme is a government instrument used to divest its stake in CPSEs without striking the secondary market. Among its anchor investors, some of the big names include Societe Generale, Bank of America Merrill Lynch, Morgan Stanley, Nomura, ICICI Prudential Mutual Fund, LIC, and SBI Mutual Fund. The government was also planning to exercise a greenshoe option accounting to Rs.4,000 to 6,000 crore in CPSE ETF FF03 over the base issue size of Rs.8,000 crore. According to the data, out of Rs.80,000 crore target from divestment in FY2018-19, the Centre has gained just Rs.15,247.

    7 December 2018

  • Indian Firms Bought Shortest-Term Debts Possible Fearing Credit Risk

    Due to their concerns regarding credit risk, the more and more corporate treasury departments in the country are deciding to park their cash in securities that mature overnight. According to the data revealed by Morningstar Investment Adviser India Pvt., the assets under overnight funds has skyrocketed to amount to Rs.123 billion in October 2018, as opposed to the previous Rs.39 billion in September 2018.

    This is due to the reason that many companies have chosen to play it safe rather than take a risk owing to the rare debt. In light of this high demand for overnight funds, 5 firms including Reliance Nippon Life Asset Management Ltd. have decided to introduce new offerings. As per the Director Manager of Research at Morningstar, Kaustubh Belapurkar, the IL&FS crisis has caused the institutional investors to become wary about the safety of the portfolios of liquid and ultra-short duration funds.

    Overnight funds might become even more popular if the regulator make the rules for money market funds even more strict. In September 2018, the money market funds suffered the worst outflows since April 2007 owing to the repayment defaults by the IL&FS Group. According to the Head of Fixed Income at SBI Funds Management, Rajeev Radhakrishnan, the implementation of other investment products such as directing liquid funds to mark to market the value of more bonds might be able to sustain the rising demand since overnight plans don’t face interest rate or credit risks.

    6 December 2018

  • Mutual Funds extend loans to listed entities against shares in promoter firms

    Mutual funds such as Reliance Mutual Fund, Aditya Birla Sun Life, and Franklin India have decided to extend loans against shares to promoter firms of Dewan Housing Finance Corp. Ltd. (DHFL), Bajaj Corp Ltd., and Piramal Enterprises Ltd.

    The head of fixed income and alternatives of Quantum Advisors, Mr. Arvind Chari said that the loan against securities or promoters funding has recently become an investment product for mutual funds. He added that the promoter’s share which is held in a private firm is used as collateral to raise funds. A spokesperson for Franklin India said that the firm does not comment on any specific security.

    5 December 2018

  • BSE 500 has 77 companies with a default chance of 0.52%

    The BSE 500 companies that have exceeded the threshold of debt-default probability has trebled since the start of 2018. Among the 77 companies that have more than 0.52% default risk probability are Bombay Dyeing, Srei Infrastructure, Indiabulls Housing Finance, Indiabulls Real Estate, Dewan Housing, Vodafone Idea, Jet Airways, and Reliance Capital. Their stocks have also fallen by 49% on an average. This was compared to 5% drop in the BSE 500 Index. These 77 companies account for 4.5% of the total market with Rs.6.75 lakh crore capitalization in total. More than 45 companies belong to the non-banking and non-finance sectors. There are more than 35 companies with Rs.5000 crore or more of capitalization.

    4 December 2018

  • Mutual Fund Firms Lending to DHFL Promoters Like YES Bank

    The mutual fund organisations have been taking the route of risk by funding the promoter of YES Bank, Rana Kapoor against his personal holdings, without having the same pledged. This strategy is now being implemented by many other mutual fund orgnaisations as well.

    Wadhawan Global Capital is the holding firm for DHFL (Dewan Housing Finance Limited) and it has been successfully able to raise Rs.2,125 crore by means of zero-coupon non-convertible debentures (ZCNCD) maturing in 2019, 2020 and 2021. This is a kind of a backdoor method that some of the promoters like to leverage in order to acquire loans against their shares without having to pledge them formally.

    3 December 2018

  • Structure of debt ETFs to be ready by March 2019

    Debt Exchange-Traded Funds (ETFs) are likely to be structured by the end of the current financial year as per the announcement made by the Finance Minister, Mr. Arun Jaitley during the FY19 Union Budget. The Ministry of Finance intends to complete the structure of these debt ETFs by March 2019. At the moment, the ministry has appointed the legal and transactional advisor but is awaiting bids from AMCs (Asset Management Companies). Once the bidding process is complete, the ministry will work out the product details.

    The finance ministry will work with the CPSEs (Central Public Sector Enterprises) to prepare the structure of the ETFs by taking their financial requirements over the coming 3 years, 5 years, and 10 years, into account. A basket for CPSEs is being prepared based on the fund requirements. Debt ETFs will be an amalgamation of ETFs and mutual funds and will have a bond form. Retail investors can subscribe to the debt ETF units directly. In the corporate bond market, securities issued by CPSEs are one of the most frequently-traded securities.

    30 November 2018

  • Mutual funds may be allowed to segregate bad securities as per a SEBI proposal

    Mutual funds may in the future, be allowed to ring-fence their distressed debt securities as per a proposal from the Securities and Exchange Board of India (SEBI). This rule referred to as ‘side-pocketing’ allows fund houses the option to segregate the distressed securities from the rest of the portfolio to make sure that the NAV (Net Asset Value) of the scheme remains enveloped. The advisory committee of the mutual fund industry recently approved this proposal. The committee was appointed by the market regulator who intends to announce it formally in the coming weeks.

    This move has been made by SEBI in the wake of the defaulting of the IL&FS (Infrastructure Leasing & Financial Services) that resulted in the deterioration in the NAVs of many debt mutual fund schemes. Some of the schemes saw a fall in their NAVs ranging between 3% and 6% on a single day which is approximately 50% to 75% of the yearly returns of some bond schemes. Side-pocketing involves the splitting of mutual funds into 2 portfolios - tradable and defaulting securities.

    29 November 2018

  • Issuers of commercial papers asked to disclose key information by mutual funds

    Non-banking finance companies (NBFcs), corporates, and other firms who issue commercial papers (CPs) may soon be required to disclose vital information regarding the CPs, to their biggest stakeholders - mutual funds. This proposal has been nudged by the Securities and Exchange Board of India (SEBI) according to which fund houses will compel the companies issuing CPs to spell out their mismatch in their asset-liability. The ALM (Asset Liability Mismatch) has caused the stress in the capital markets to deepen. Apart from the tightness in the liquidity, there have also been concerns regarding the ALM in some NBFCs and housing finance companies (HFCs).

    The market regulator had to nudge the fund houses to ask CP-issuers to disclose key information as they do not fall under the jurisdiction of the SEBI, but falls under the purview of the Reserve Bank of India (RBI). CPs are unsecured, convenient instruments that are used to borrow short-term funds and their maturities range between 7 days to 1 year. They were introduced in the 90s to permit highly-rated corporates, bond houses, and financial institutions to diversify their short-term borrowings sources.

    28 November 2018

  • Investor and Analyst Day 2018 hosted by Zensar in Mumbai

    Zensar, a firm specialising in digital transformation, is all set to host an Investor and Analyst Day 2018 on 28 November 2018 at the Sofitel Hotel, BKS Mumbai. Zensar is a leading firm in the digital and technology services space and partners with global organisations through their digital transformation journey. The services of Zensar expands across industries and through this event, its global leadership will make a presentation of the firm’s growth focus and global business highlights. Knowledge exchange and interactive sessions will be an integral part of the event. On the Bombay Stock Exchange, the stocks of Zensar Technologies Ltd. were trading at Rs.230 and previously, it was seen closing at Rs.237.35. As on 21 November 2018, a total of 4,233 shares were traded in more than 379 trades.

    23 November 2018

  • SIP inflow towards mutual funds rises 42% in October

    Retail investors will be afloat with Systematic Investment Plan (SIP) inflows towards mutual funds touching Rs.7,985 crore in the month of October. This is a hike of 42% from the previous year. The total funds that were collected through SIPs have touched Rs.52,472 crore in the current financial year, as per the data from the Association of Mutual Funds in India.

    SIPs are preferred amongst the retail investors as these help in reducing market timing risk. Investors are also not showing much interest in traditional modes of investments such as real estate and gold. Industry experts are of the opinion that the contributions through SIPs went up despite the volatility in the stock market as there was rupee depreciation and rise in crude oil prices.

    22 November 2018

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