Home >Mutual Funds >News >Daily or monthly SIP in mutual funds: Which will earn higher returns?

I am new to investing in mutual funds. I am a college student. My friends have recommended me to start investing in mutual funds. I can put around 5,000 every month in mutual funds. Kindly guide me which option should I choose- daily, weekly, monthly or quarterly SIP? Which one will earn me better returns? I am planning to start with index funds. Is it fine?

-K. Jeet Singh

By Dinesh Rohira, Founder & CEO,

Firstly, you should be mindful of taking advice or recommendation from your friends and relatives unless they are experts in the field. Being a new investor it is always better to take professional help to build a strong foundation for investment. Since SIP is one way of cultivating a discipline in investors, the frequency of the investment shouldn’t matter as you are willing to allocate 5,000 on a monthly basis. You should also go through risk profiling before making any decision so that you know about suitability of various categories in a mutual fund based on risk capacity.

Nevertheless, considering your long-term objective we will recommend large cap (Canara Robeco Bluechip Fund) and mid cap (DSP Midcap Fund) to start with your SIP in the current market scenario. You also need to evaluate investment not just based on returns but on the basis of your risk-profile, investment duration which will ultimately guide you with a desired return.

Lastly, although it is recommended to invest in index funds, the large cap mutual fund schemes have managed to outperform index funds over a longer period of time. Further, the large cap fund mirrors the index fund with more flexibility to go beyond predefined stock baskets.

(Views as expressed by the expert)

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