Mutual fund SIP: It's better to keep investing through monthly SIP as it is one of the most suitable tools for achieving long-term investment goals, say experts
Mutual fund SIP: Systematic Investment Plan or SIP is fast growing among the young professionals because it helps an investor to start investing with small amount and crate huge fund with the passé of time. This mutual fund option is suitable to those investors who don't have a lump sum amount for one time investment. According to tax and investment experts, it's better to keep investing through monthly SIP as it is one of the most suitable tools for achieving long-term investment goals. However, while choosing them, one needs to check its performance and rating by reputed agencies. In fact, rating agencies do a lot of research while giving rating to a particular fund. Hence, for an investor, it is important to search the rating given by reputed agencies to the fund they are looking for investing.
For information to the mutual fund SIP investors, if they have any plan of starting new SIP, Morningstar has given 5-star rating to Axis Bluechip Fund, Canara Robeco Emerging Equities Fund and Nippon India Short Term Fund.
Here we list out details of these three mutual funds SIP plans:
1] Axis Bluechip Fund: This fund has been given 5-star by not just Morningstar but by Value Research too. The probable reason for 5-star rating being given by two reputed rating agencies could be the robust return delivered by this fund in last one year and above the normal return of 10-12 per cent in the last three years. According to the Value Research website, if an investor had invested ₹10,000 monthly in SIP mode, its absolute return after one year would have been ₹1.42 lakh while in the same investment was done for three years, then the investors absolute return would have been 4.98 lakh while the net investment in the period would have been ₹3.60 lakh. Similarly, if the investment was done for 5 years, the absolute return would have been ₹9.5 lakh while one's net investment in these 5 years would have been ₹6.0 lakh.
2] Canara Robeco Emerging Equities Fund: This fund has also been given 5-star by Morningstar and Value Research. In its regular plan, if an investor had invested monthly ₹10,000 in SIP mode, the Value Research data shows that one's absolute return in one year would have been ₹1.53 lakh. However, if the SIP had begun three years back, then one's absolute return after 3 years would have been ₹5.51 lakh on investment of ₹3.6 lakh during the investment period. Similarly, if someone had invested ₹10,000 per month in monthly SIP mode in the same plan, one's absolute return after 5 years would have been ₹9.88 lakh while one's investment in these 5 years would have been ₹6.0 lakh.
3] Nippon India Short Term Fund: This plan has been given 5-star by Morningstar while Value Research has given 4-star rating to this plan. According to the Value Research data, if an investor had invested ₹10,000 monthly in SIP mode, one's absolute return in the last one year would have been ₹1.23 lakh while in the last 3 years, the same SIP's absolute return would have been ₹4.04 lakh on ₹3.6 lakh investment. However, if the investment had begun 5 years ago, then one's net investment of ₹6.0 lakh would have delivered absolute return of ₹7.23 lakh.