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