One of the two ways to invest in mutual funds is through a SIP, or systematic investment plan. Another choice is to make a lump sum investment in mutual funds. Spreading out your investments and making regular, small investments in mutual funds is possible with a SIP.
Everybody should use SIPs to invest in mutual funds. For novice investors, SIPs are especially advised. By making a SIP investment in mutual funds, you can experience some of their potentials. Additionally, it is best to start out by making SIP investments in mutual funds if you are new to the world of equity-linked investments.
There is no need to set aside a lump sum when investing through a SIP. As a result, you can start investing with a modest sum. Through a systematic investment plan (SIP), certain mutual fund plans allow you to make monthly investments as low as Rs 500. This option is not offered by the majority of other investment options.
Similar to a child’s piggy bank, SIP operates on a straightforward principle. A child can save money by routinely placing small sums of cash into a piggy bank. The best SIP plans only differ in that they use mutual funds to invest in a particular asset class, as opposed to piggy banks, which sit on investments.
Based on the NAV, or price, of each share of your fund on that specific day, you will receive a specific unit of that mutual fund. Starting with just Rs. 500, you can gradually increase your investment until you reach any limit at any time.
A predetermined amount is taken out of your checking or savings account and invested in the mutual fund scheme of your choice when you select the best SIP investment. The money is taken out either quarterly or monthly. You can choose to redeem the SIP on a regular basis or all at once. Investors can receive recurring payments from the money credited to their bank accounts through periodic withdrawals, or SWP.
Quant active fund
A Quant Mutual Fund Multi-Cap mutual fund strategy is the Quant Active Fund Direct-Growth. Since its inception on January 1st, 2013, this fund has been operating for nine years and eleven million dollars. As of September 30, 2022, Quant Active Fund Direct-Growth had 3,221 crores in assets under management (AUM), making it a small fund by comparison to others in its class. The fund has an expense ratio that is less than most other multi-cap funds at 0.58%.
PGIM India Flexi Cap Fund:
A multi-cap mutual fund strategy is offered by PGIM India Mutual Fund’s PGIM India Flexi Cap Fund Direct-Growth. Since its creation on February 11, 2015, this fund has been in operation for 7 years and $9 million. The PGIM India Flexi Cap Fund Direct-Growth had 5,291 crores in assets under management as of September 30, 2022, ranking it as a medium-sized fund in its sector. The fund has an expense ratio that is lower than the majority of other multi-cap funds at 0.31%.
Quant Focused Fund
Quant Focused Fund Direct-Growth is a Quant Focused Mutual Fund Scheme. Since it was founded on January 1st, 2013, this fund has been operating for nine years and has amassed 11 million dollars. As of September 30, 2022, Quant Focused Fund Direct-Growth had 160 crores in assets under management (AUM), making it a small fund by comparison to others in its class. The fund has a lower expense ratio than the majority of other targeted funds at 0.57%.
Edelweiss Large & Mid Cap Direct Plan-Growth
An Edelweiss Mutual Fund Large & MidCap mutual fund scheme is the Edelweiss Large & Mid Cap Direct Plan-Growth. On January 1, 2013, eleven million dollars were established for this fund, which has been in operation for nine years. With 1,636 crores in assets under management (AUM) as of September 30, 2022, Edelweiss Large & Mid Cap Direct Plan-Growth is a medium-sized fund. The fund has a lower expense ratio than the majority of other large and midcap funds at 0.49%.
Kotak equity opportunities fund
A large and midcap mutual fund program offered by Kotak Mahindra Mutual Fund is the Kotak Equity Opportunities Fund Direct-Growth. Since its inception on January 1st, 2013, this fund has been operating for nine years and eleven million dollars. At 11,370 crores in assets under management (AUM) as of September 30, 2022, Kotak Equity Opportunities Fund Direct-Growth is a medium-sized fund by category standards. The fund has a lower expense ratio than large- and mid-cap equity funds at 0.59%.
Sundaram focused fund
Sundaram Focused Fund Direct-Growth is a Sundaram Mutual Funds-focused mutual fund program. Having been started on January 1, 2013, this fund has been in operation for 9 years and 11 million dollars. Sundaram Focused Fund Direct-Growth is a medium-sized fund by category standards, with 787 crores in assets under management (AUM) as of September 30, 2022. The fund has a higher expense ratio than the majority of other focused funds, at 1.48%.
One of the main advantages of joining a SIP is that it encourages consistent saving habits and instills discipline in your financial decisions. A SIP is based on the philosophy of saving small amounts of money on a regular basis. It allows the investor to accumulate wealth over time.
Rupee Cost Averaging
SIPs can help with cost-to-return averaging. Because the equity market is volatile, investors can buy more units when the price of shares is low and fewer units when the price of shares is high. SIPs allow regular investors to acquire more shares at lower prices than investors who invest large sums of money all at once.
Is not expensive
A SIP investment can be made for as little as Rs. 500. Such a small sum will not strain your budget, and it will grow over time to provide you with substantial returns.
Funds can be used in an emergency
With a SIP, you have a one-click withdrawal option that lets you take the money out whenever you want. This fund can be used to pay for unanticipated costs like lost wages, accidents, illnesses, and so forth.
Compounding Power
Compound interest is the idea that any small amount of money invested over a long period of time will compound and generate positive returns. As a result, the investor can achieve long-term financial goals by making small, consistent investments that add up to a sizable corpus.