Systematic Investment Plan proves to be a boon to investors who would rather invest a fixed sum at intervals instead of making a lump sum investment in mutual funds. You reap the benefits of diversification of your investment, are more immune to the risks of equity fluctuations, including numerous other benefits.
However, this disciplined way of investing your hard-earned money makes complete sense when you invest in the best SIP. Most people educate themselves about the best SIP plans before taking the leap.
However, if you wonder what you should know before investing in SIP, here are a few points, followed by the best SIP investment plan in India for 5 years.
- To begin with, you should do your research and test the waters before researching about the best SIPs. If not a financial advisor, a few blogs would do the job for you. Look for tips and tricks, what factors play a role in deciding your investment amount, and much more. If calculations confuse you, you can as well make use of an online SIP calculator.
- SIP means long-term investment. You need to give it enough time for it to yield the desired return. So, prepare yourself for the highs and lows, know that SIP perform best in volatile market, and stay put.
- In case you plan to exit sooner, decide what’s the best time for you to do so. It’s a general rule of thumb that exiting when the market is relatively higher is better.
- Finally, when looking for SIPs to invest in, check the long-term record of their performance. Go up to at least four to five years in the past to ensure you’re investing in the right one. With that said, let’s move on to the best SIP plans for 5 years.
BEST SIP PLANS FOR 5 YEARS
You can choose the best systematic investment plan for 5 years out of the list provided below.
1] Axis Long-Term Equity Fund
One of the most popular names in the SIP mutual fund investment category, Axis ELSS scheme has come a long way, outdoing most of other plans since its conception.
The minimum investment requirement is Rs. 500, and its 5-year return is 13.60%. This is an amazing option for anybody planning for a long-term investment. However, make sure you go with this SIP only if you have moderate to high-risk tolerance.
2] DSP Tax Saver Fund
DSP Tax Saver Fund is yet another SIP that’s one of the best SIP plans. It is an open-ended growth fund that has a return of 10.69% in 5 years. Upon investing Rs. 500 each month, you’d get an estimate return of Rs. 39,500.
This is again a long-term investment SIP and you need to have high-risk tolerance. However, the returns are quite promising.
3] DSP Equity Opportunities Fund
DSP Equity Opportunities is a large and midcap growth fund that is open ended type of a systematic investment plan. It yields an estimated return of 10.36% in 5 years, which would account to an estimated amount of Rs. 39,000 when you invest Rs. 500 each month for 5 years. You need to have a moderate to high-risk tolerance for this fund as well.
4] ICICI Prudential Bluechip Fund
ICICI Prudential Bluechip Fund is a growth fund, SIP that generates returns from a portfolio that is invested in large cap companies. It yields a 5-year CAGR return of 8.77%. Upon investing Rs. 500 each month for 5 years, the estimated return would be Rs. 37,500. This SIP mutual fund investment also requires you to be open to a moderate to high-risk tolerance.
5] Franklin India Equity Fund
Franklin India Equity is an open-ended growth fund that has an estimated return of 8.32% over a period of 5 years. This is a SIP that requires high-risk tolerance. Minimum investment that you have to make each month is Rs. 5000, which means the return on investment after five years would be around Rs. 3,70,500.
Investing Rs. 5000 might not go well with many investors. However, if that’s not a concern, this systematic investment plan is a great option as it is doing well in the market when compared to many other funds.
These are some of the major systematic investment plans that are predicted to do well for 5 years. Some other SIP Investment plans in India that perform well are Aditya Birla Sun Life Pure Value Fund and HDFC Equity Fund.
When looking for the best mutual funds for SIP, make sure you do your research. While it is important to see how well a SIP is set to perform in the future, this prediction is a result of the past trends as well. Besides this, see if the SIP fits your conditions like the minimum investment amount that you’d have to make each month.
Look for the perfect timing, consider the NAV, and try to seek advice from a family member, friend, or an online platform before investing. When you consider all the aspects pertaining to the plan, you’re more likely to reap greater benefits of investing in a systematic investment plan.
You may also like: What Is SIP and How to Use SIP Calculator.
3 Comments
Hi Harshal,
Thanks for this informative article.
Hi Harshil, You are doing a great job by helping others in their investment planning.
Great post ! Very well selected SIP for mutual funds.