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Top 10 SIP Mutual Funds

Mutual Fund | October 29

A number of our clients are young people who are in their initial phases of their careers. These young investors often question what a good investment strategy is for them. Given the risk profile of individual clients, we suggest an aggressive strategy to build capital by way of Systematic Investment Plan (SIP).  They are having regular income and we suggest them to initiate a SIP investment and the money is invested in a preselected mutual fund. The amount of investment is the same irrespective of the levels of the market. Hence, in case the market goes down, investors will get more units of the fund and in case the market is rising, they will get fewer units.

Mutual funds have a unique feature. There are funds for the most conservative to most aggressive investor. For a conservative investor, we recommend liquid debt funds & for most aggressive investor we have small and mid-cap funds. There are large cap funds also available for investment that should be considered based on the risk profile of the client. High Risk High Return Mutual Funds provide a long term growth opportunities for a young investor. 

We have done a back-testing analysis of mutual funds by investing a SIP of Rs 10,000 in various funds & estimated the returns various funds have provided. We have seen that, even in current market condition where-in the NIFTY has declined by nearly 20%, funds have been able to generate a good CAGR. The best high growth SIPs for long term are noted below -

Scheme Name

Category

Launch Date

 AUM (Crore)

Expense Ratio (%)

 Invested Amount

 Current Value

Return (%)

Mirae Asset Emerging Bluechip Fund - Growth

Large and Mid-Cap

09-07-2010

         5,681

2.4

       6,00,000

       8,99,603

16.7

Principal Emerging Bluechip Fund - Growth

Large and Mid-Cap

12-11-2008

         1,837

2.3

       6,00,000

       8,26,364

13.2

Kotak Equity Opportunities Fund - Growth

Large and Mid-Cap

09-09-2004

         2,324

2.1

       6,00,000

       7,34,571

8.3

L&T Mid Cap Fund - Growth

Mid Cap

09-08-2004

         3,095

2.4

       6,00,000

       8,41,597

13.9

Mirae Asset India Equity Fund - Growth

Multi-Cap

04-04-2008

         8,755

2.0

       6,00,000

       8,01,773

11.9

Principal Multi Cap Growth Fund - Growth

Multi-Cap

25-10-2000

             677

2.7

       6,00,000

       7,81,317

10.8

Aditya Birla Sun Life Equity Fund - Growth

Multi-Cap

27-08-1998

         9,419

2.2

       6,00,000

       7,74,410

10.5

ICICI Prudential Multicap Fund - Growth

Multi-Cap

01-10-1994

         2,911

2.3

       6,00,000

       7,72,314

10.4

SBI Small Cap Fund - Growth

Small Cap Fund

05-09-2009

         1,038

2.7

       6,00,000

       9,37,892

18.5

HDFC Small Cap Fund - Growth

Small Cap Fund

03-04-2008

         4,948

2.3

       6,00,000

       8,71,574

15.4

Aditya Birla Sun Life Small Cap Fund - Growth

Small Cap Fund

31-05-2007

         2,051

2.4

       6,00,000

       7,43,428

8.8

L&T India Value Fund-Growth

Value

08-01-2010

         7,743

2.3

       6,00,000

       7,87,395

11.2

IDFC Sterling Value Fund -Growth

Value

07-03-2008

         2,822

2.2

       6,00,000

       7,67,272

10.1

Aditya Birla Sun Life Pure Value Fund - Growth

Value

01-03-2008

         3,878

2.4

       6,00,000

       7,58,074

9.6

 

We can see from the table above that one can get good return by way of SIP investment in the aggressive mutual funds. There are 2 key points while investing –

a)     Keep investing no-matter what the market movement is. No one on earth can predict the short term nature of the markets and we are well advised not to indulge

b)     Never withdraw from your SIP for atleast 5 years so that you can see a meaning full corpus at the end of your investment tenure.

Do let us know in case of any queries.

Happy Investing

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