SIP vs Mutual Fund

What is a Mutual Fund?

Mutual Funds are a group of assets or money market instruments managed by experts. The mutual fund portfolio can be purchased by different investors. The Net Asset Value of the fund is calculated at the end of a trading day.

What is SIP?

SIP or Systematic Investment Plan is a method by which investors invest a small amount of money in a particular mutual fund portfolio, at regular intervals. A predetermined amount will be paid throughout the investment period. This is different from the usual method of mutual fund investment wherein the investor pays a lump sum amount on a one-time basis. This method is highly flexible since the investor can decide when to pay the next installment of funds to purchase assets and can also exit the mutual fund when needed. The investment can be made in a quarterly, monthly, bi-monthly or weekly basis.

Performance and Returns

A lump sum investment in mutual funds are profitable when equity markets are in the process of rising higher. This would create aggressive returns for the investment made.

However, when the stock market has high volatility, an SIP is the safest option due to Rupee-Cost Averaging and Compounding. The investor will buy more units of the asset when the market is down and less units of the asset when the value is higher. But in the long run, the returns earned will be balanced since average cost is considered.

Examples of SIP and Mutual Funds Available in India

SIP: Examples

Some of the SIP Mutual Funds that have been performing well in the past 5 years are:

Category Mutual Fund Scheme (SIP)
Large Cap Mutual Funds ICICI Focused Blue Chip Fund
Large Cap Mutual Funds UTI Equity Fund
Large Cap Mutual Funds Birla SL Frontline Equity Fund
Small Cap and Mid Cap Mutual Funds Mirae Emerging Blue Chip Fund
Small Cap and Mid Cap Mutual Funds Franklin India Smaller Cos Fund
Small Cap and Mid Cap Mutual Funds UTI Mid Cap Fund
Diversified Funds Franklin High Growth Cos Fund
Diversified Funds ICICI Pru Value Discovery Fund
Balanced or Hybrid Funds ICICI Pru Balanced Fund
Balanced or Hybrid Funds HDFC Balanced Fund

Mutual Fund: Examples

Moderate Risk Equity Funds

  • Kotak Select Focus Fund(G)
  • ICICI Pru Focused BlueChip Eq Fund(G)
  • Franklin India Prima Plus Fund(G)
  • BNP Paribas Equity Fund(G)
  • Birla SL Frontline Equity Fund(G)

High Risk Equity Funds

  • UTI Mid Cap Fund(G)
  • SBI Magnum MidCap Fund-Reg(G)
  • Reliance Equity Opportunities Fund(G)
  • L&T India Value Fund-Reg(G)
  • Invesco India Mid N Small Cap Fund(G)
  • ICICI Pru Value Discovery Fund(G)
  • HDFC Mid-Cap Opportunities Fund(G)
  • Franklin India Prima Fund(G)
  • BNP Paribas Mid Cap Fund(G)

Moderate-Risk Tax-Saving Funds

  • IDFC Tax Advt(ELSS) Fund-Reg(G)
  • Franklin India Taxshield(G)
  • BNP Paribas LT Equity Fund(G)

High-Risk Tax-Saving Funds

  • Reliance Tax Saver (ELSS) Fund(G)
  • Invesco India Tax Plan(G)
  • ICICI Pru LT Equity Fund (Tax Saving)(G)
  • Axis LT Equity Fund(G)

Long-Term Debt Funds (Moderate – High Risk)

  • UTI Dynamic Bond Fund-Reg(G)
  • Reliance Reg Savings Fund-Debt Plan(G)
  • HDFC Medium Term Opportunities Fund(G)
  • Franklin India IBA-A(G)
  • BNP Paribas Medium Term Income Fund(G)
  • Birla SL Dynamic Bond Fund-Ret(G)


Mutual Fund investments will be subject to market risks. Any mutual fund listed in the document does not guarantee fund performance or its underlying creditworthiness. Do read the mutual fund document thoroughly before investing. Specific investment needs and other factors have to be taken into account while designing a mutual fund portfolio.

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