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If you want your investments to be favored in all Market conditions, then take your investments SIP way! Systematic Investment Plans (SIPs) are considered to be the most efficient ways of investing in Mutual Funds. And if you are planning to invest in equities, then SIPs are the best way to make longing returns. Best equity SIP funds can give you the desirable returns in the long-term to fulfill Financial goals. So, let’s see how SIP works, benefits of SIP investment, significant use of a sip calculator along with the best performing SIP funds for equity investments.
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Ideally, when investors plan to invest in equities, they often doubt about the stability of returns. This is because they are linked to the market and are often exposed to Volatility. Thus, to balance such volatility and ensure long-term stable returns, SIPs are highly recommendable in equity investments. Historically, in bad market phase, it is noticed that investors who had taken the SIP route earned more stable returns than those who took the lump sum route. SIP’s investment is spread out over time, unlike a lump sum investment which takes place all at once. Therefore, your money in SIP starts growing each day (being invested in the stock market).
A systematic Investment plan is also widely considered to achieve long-term financial goals like Retirement planning, child’s education, purchase of a house/car or any other assets. Before we look at some more benefits of investing in a SIP, let's check some of the best equity SIP funds to invest.
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) JM Core 11 Fund Growth ₹14.3984
↑ 0.08 ₹51 500 14.7 19.3 24.5 21.1 8.8 7.1 Nippon India Large Cap Fund Growth ₹64.3266
↑ 0.27 ₹15,583 100 11 18.6 22.1 26.8 13.3 11.3 SBI Bluechip Fund Growth ₹70.3455
↑ 0.13 ₹39,301 500 6.4 11.9 14.3 21.3 12.1 4.4 ICICI Prudential Bluechip Fund Growth ₹76.97
↑ 0.30 ₹40,286 100 9.3 11.6 13.9 22.3 12.5 6.9 Aditya Birla Sun Life Frontline Equity Fund Growth ₹386.08
↑ 0.94 ₹23,758 100 8.3 13 13.3 20.9 11 3.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) Principal Emerging Bluechip Fund Growth ₹183.316
↑ 2.03 ₹3,124 100 2.9 13.6 38.9 21.9 19.2 Kotak Equity Opportunities Fund Growth ₹238.125
↑ 1.57 ₹14,655 1,000 11 16.4 19.6 23.8 14.9 7 DSP BlackRock Equity Opportunities Fund Growth ₹417.545
↑ 2.25 ₹8,691 500 12.4 17.2 19 22.7 13.1 4.4 Invesco India Growth Opportunities Fund Growth ₹59.65
↑ 0.31 ₹4,042 100 10.3 17.1 16.8 19.7 11 -0.4 IDFC Core Equity Fund Growth ₹85.644
↑ 0.43 ₹2,802 100 14.5 18.2 24.1 25.4 12.9 6.9 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Dec 21
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) Taurus Discovery (Midcap) Fund Growth ₹94.35
↑ 1.53 ₹94 1,000 19.1 26.7 29.4 25.7 15.1 6.7 Sundaram Mid Cap Fund Growth ₹877.681
↑ 6.68 ₹8,358 100 15.5 21.1 21.4 26.5 11.8 4.8 L&T Midcap Fund Growth ₹245.183
↑ 1.87 ₹7,920 500 15.2 19.6 20.9 22.2 11.3 1.1 Kotak Emerging Equity Scheme Growth ₹89.078
↑ 0.49 ₹31,389 1,000 13.9 17.6 19.2 29.7 17.5 5.1 HDFC Mid-Cap Opportunities Fund Growth ₹126.933
↑ 1.13 ₹45,449 300 17.9 26.5 32.8 32.3 16.6 12.3 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) L&T Emerging Businesses Fund Growth ₹59.5566
↑ 0.57 ₹10,766 500 15.7 25.9 31.5 40.1 17.1 1 Aditya Birla Sun Life Small Cap Fund Growth ₹64.494
↑ 0.56 ₹4,160 1,000 16.4 27.3 26.3 29.9 10.7 -6.5 SBI Small Cap Fund Growth ₹131.097
↑ 1.29 ₹20,018 500 12.1 18.8 20.4 31.2 18.8 8.1 HDFC Small Cap Fund Growth ₹101.791
↑ 0.68 ₹21,067 300 16.4 28.1 39.6 38.9 17.7 4.6 Franklin India Smaller Companies Fund Growth ₹120.688
↑ 0.60 ₹9,104 500 15.4 26 37.2 37.8 15.8 3.6 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) Kotak Standard Multicap Fund Growth ₹60.235
↑ 0.18 ₹40,184 500 7.6 13.1 14.6 19.7 11.3 5 Motilal Oswal Multicap 35 Fund Growth ₹36.6318
↑ 0.15 ₹8,288 500 8.1 15.8 11.4 12.8 6.2 -3 Mirae Asset India Equity Fund Growth ₹86.522
↑ 0.20 ₹35,880 1,000 7.4 11.2 11 18.5 11.4 1.6 JM Multicap Fund Growth ₹66.421
↑ 0.56 ₹475 500 15.7 21.8 26.6 27.8 15.2 7.8 BNP Paribas Multi Cap Fund Growth ₹73.5154
↓ -0.01 ₹588 300 -4.6 -2.6 19.3 17.3 13.6 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) IDFC Infrastructure Fund Growth ₹31.358
↑ 0.32 ₹761 100 16.2 27 32.6 35.3 13.8 1.7 Franklin Build India Fund Growth ₹86.9229
↑ 0.30 ₹1,486 500 15.6 23.6 31.8 34.9 16.1 11.2 Aditya Birla Sun Life Banking And Financial Services Fund Growth ₹46.47
↑ 0.22 ₹2,860 1,000 9.9 20.4 21.4 26.6 8.4 11.5 Sundaram Rural and Consumption Fund Growth ₹72.2012
↑ 0.64 ₹1,242 100 14.3 19.6 17.8 20.4 10.5 9.3 DSP BlackRock Natural Resources and New Energy Fund Growth ₹61.859
↑ 0.60 ₹728 500 7.5 8 17.4 26.3 12.9 9.8 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) IDFC Tax Advantage (ELSS) Fund Growth ₹117.121
↑ 0.52 ₹5,014 500 11.5 18.2 21 29.6 15.1 4.2 Tata India Tax Savings Fund Growth ₹32.9538
↑ 0.08 ₹3,557 500 11.4 14.9 16.4 22.7 12.8 5.9 DSP BlackRock Tax Saver Fund Growth ₹94.037
↑ 0.36 ₹11,805 500 10.7 15.8 17 24.2 14.3 4.5 L&T Tax Advantage Fund Growth ₹89.4863
↑ 0.40 ₹3,300 500 7.8 14.5 15.5 19.4 9.3 -3 Principal Tax Savings Fund Growth ₹379.456
↑ 0.41 ₹1,090 500 10 14.9 14.8 23 11.8 4.3 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) L&T India Value Fund Growth ₹72.0342
↑ 0.51 ₹9,077 500 13.8 19.4 27.4 27.3 13.8 5.2 Tata Equity PE Fund Growth ₹241.99
↑ 1.05 ₹6,019 150 10 18.8 20.5 22.5 11 5.9 JM Value Fund Growth ₹67.9195
↑ 0.51 ₹205 500 18.6 25.3 36.4 30 15.4 5.3 Aditya Birla Sun Life Pure Value Fund Growth ₹89.1186
↑ 0.56 ₹4,572 1,000 14.9 24.6 27.3 26.1 8.8 3.5 IDFC Sterling Value Fund Growth ₹109.523
↑ 0.63 ₹6,543 100 12 19.4 23.4 34.8 14.7 3.2 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) Axis Focused 25 Fund Growth ₹41.17
↑ 0.07 ₹15,629 500 4.1 10.3 -0.6 11.8 6.9 -14.5 Aditya Birla Sun Life Focused Equity Fund Growth ₹101.423
↑ 0.23 ₹6,230 1,000 8.9 13 11.7 19.1 11 0.4 Sundaram Select Focus Fund Growth ₹264.968
↓ -1.18 ₹1,354 100 -5 8.5 24.5 17 17.3 HDFC Focused 30 Fund Growth ₹150.58
↑ 0.10 ₹5,828 300 9.3 14.6 21.8 29.3 13.7 18.3 Franklin India Focused Equity Fund Growth ₹78.4259
↑ 0.14 ₹9,387 500 9.8 14.4 16.5 27.6 14.5 8.9 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
As per the Budget 2018 speech, a new Long Term Capital Gains (LTCG) tax on equity oriented Mutual Funds & stocks will be applicable from 1st April. The Finance Bill 2018 was passed by voice vote in Lok Sabha on 14th March 2018. Here’s how new income tax changes will impact the equity investments from 1st April 2018. *
LTCGs exceeding INR 1 lakh arising from Redemption of Mutual Fund units or equities on or after 1st April 2018, will be taxed at 10 percent (plus cess) or at 10.4 percent. Long-term Capital Gains till INR 1 lakh will be exempt. For example, if you earn INR 3 lakhs in combined long-term capital gains from stocks or Mutual Fund investments in a financial year. The taxable LTCGs will be INR 2 lakh (INR 3 lakh - 1 lakh) and Tax Liability will be INR 20,000 (10 per cent of INR 2 lakh).
Long-term capital gains are the profit arising from selling or redemption of Equity Funds held more than a year.
If Mutual Fund units are sold before one year of holding, Short Term Capital Gains (STCGs) tax will apply. The STCGs tax has been kept unchanged at 15 percent.
Equity Schemes | Holding Period | Tax Rate |
---|---|---|
Long Term Capital Gains (LTCG) | More than 1 Year | 10% (with no indexation)***** |
Short Term Capital Gains (STCG) | Less than or equal to a year | 15% |
Tax on Distributed Dividend | - | 10%# |
*Gains up to INR 1 lakh are free of tax. Tax at 10% applies to gains above INR 1 lakh. Earlier rate was 0% cost calculated as closing price on Jan 31, 2018. #Dividend tax of 10% + Surcharge 12% + Cess 4% =11.648% Health & Education Cess of 4% introduced. Earlier, education Cess was 3%.
Some of the important Benefits of Systematic Investment Plans are:
One of the biggest advantages that a SIP offer is Rupee Cost Averaging, which helps an individual to average out the cost of an asset purchase. While making a lump sum investment in a mutual fund a certain number of units are purchased by the investor all at once, in the case of a SIP the purchase of units is done over a long period and these are spread out equally over monthly intervals (usually). Due to the investment being spread out over time, the investment is made into the stock market at different price points giving the investor the benefit of averaging cost, hence the term rupee cost averaging.
SIPs offer the benefit of the Power of Compounding. Simple interest is when you gain interest on only the principal. In the case of compound interest, the interest amount is added to the principal, and interest is calculated on the new principal (old principal plus gains). This process continues every time. Since the mutual funds in the SIP are in instalments, they are compounded, which adds more to the initially invested sum.
SIPs are very affordable. The monthly minimum investment amount in SIP can be as low as INR 500. Some fund houses, even offer something called a “MicroSIP” where the ticket size is as low as INR 100. This gives a good option for young people to start their long-term investment at an early stage of life.
SIP calculator can be the most useful tool in your investment. It estimates the growth for your SIP investment till the time you would want to stay invested. So, before even Investing in a fund, one can predetermine their total SIP Earnings via SIP calculator. The calculators normally take inputs such as the SIP investment amount one seeks to invest, the tenure of investing, expected Inflation rates (one needs to account for this). The illustration of this is given below:
Let’s suppose, if you invest INR 5,000 for 10 years, see how your SIP investment grows-
Monthly Investment: INR 5,000
Investment Period: 10 years
Total Amount Invested: INR 6,00,000
Long-term Growth Rate (approx.): 14%
Expected Returns as per SIP calculator: INR 12,46,462
Net Profit: INR 6,46,462
The above calculations show that if you invest INR 5,000 monthly for 10 years (a total of INR 6,00,000) you will earn INR 12,46,462
which means the net profit you make is INR 6,46,462.
Isn’t it great!