You are in the search of a SIP investment plan which gives the best return. Good! I also want the same. Actually, everyone wants a formula which can give the highest return.
But, is this formula SIP? Do you think that SIP is the ultimate thing to give the best profit?
If your answer is the yes, you are not alone. Rather, every second person thinks that SIP can do wonders. Not to mention the mutual funds have aggressively campaigned for the SIP. But do you really know about the SIP? Do you know that SIP is not an investment plan rather a way of investment? SIP is the mechanism of regular investment.
I do agree that for a layman investor, SIP is the correct method of Investing. The lump sum investment is not advised to those who are not well versed in the share market.
Also Read : SIP Vs Lump sum
So, It is natural that you want to know about the mutual funds which are most suitable for the SIP. You should know the mutual fund schemes which do justice with the regular investments.
In this post, I would find out the best SIP plan of equity mutual funds. The equity mutual funds are those mutual funds which invest in shares.
- 1 The Qualities of Best SIP Mutual Funds
- 2 Steps To Select Best Mutual Fund Plan For SIP
- 3 5 Best SIP Investment Plans
The Qualities of Best SIP Mutual Funds
The best investment plan for you may not be the best investment plan for your friend. Both of you have the different objective, attitude and situation. But I have decided to tell you the best SIP investment plan. Under this circumstance, I have to assume your requirement. On the basis of this requirement, I would pick the best mutual fund scheme.
What A SIP Investor Wants
- A SIP Investor wants the good return to fulfill his aspirations.
- The SIP investment should give steady return
- There should not be much ups and down. You may need money anytime.
These are my general assumptions about the SIP investor. On the basis of these assumptions, I would select those equity mutual funds which have the following qualities.
- It Should Give Above Average Return.
- It should not fall too much at the time of market downturn. In other words, it should not be very volatile.
- The best scheme should not take an excessive risk because SIP investor is a small investor. I understand that small investors don’t have money to lose in the share market.
Steps To Select Best Mutual Fund Plan For SIP
To select the best equity mutual fund for the SIP, I have gone through these steps.
4 & 5 Star Rating
I made a basket of 4-star and 5-star funds. The mutual fund research agencies give a star rating on the parameters of return, portfolio and risk. I did not want to take any chance therefore gone for the 4-star and 5-star rating from the Value Research.
I have selected those equity mutual funds which are relatives less volatile. Thus, I have chosen only those mutual fund scheme who have the beta of 0.9. It means if the market goes down by 10% these funds don’t go down beyond 9%. The beta is the measure of volatility. The lesser the beta more steady would be the fund.
Further, among these low beta mutual fund scheme I have sorted only those scheme which takes ‘low’ risk. The low risk is necessary to keep your investment safe.
I have considered the return in the last step. It was deliberate to consider the performance at a later stage. Since I have taken only those funds which are 4 and 5-star, I was not much concerned about the performance. I have ranked the funds on the basis of 5-year return. For a SIP investor, longer term horizon is desirable.
5 Best SIP Investment Plans
After going through these steps, I have this list. In this list, there are funds which invest in big companies and there are some funds which invest in midcap shares, as well.
I have also given you the return of SIP investment during last 5 years. The XIRR is the average annual return of the Each investment of the SIP plan.
|Fund||Rating||Beta||Risk||5-year CAGR||SIP XIRR|
|Mirae Asset Emerging Bluechip Fund||* * * * *||0.90||Low||28.6%||32.32%|
|SBI Magnum Midcap Fund||* * * *||0.85||Below Average||26.77%||31.08%|
|Axis Long Term Equity Fund||* * * * *||0.85||Low||23.06%||23.9%|
|SBI Bluechip Fund||* * * * *||0.90||Low||20.38%||20.81%|
|Mirae Asset Great Consumer Fund||* * * * *||0.81||Low||19.20%||18.66%|
Mirae Asset Emerging Bluechip Fund
This fund was a surprise to me. Till now I have researched the funds within the category. After taking the whole spectrum of Equity mutual funds, I have discovered the Mirae Asset Emerging Bluechip Fund. The beta of the fund is 0.9, It means that fund is far less volatile than the Nifty or Sensex. The outstanding SIP return proves the steady growth of the fund. This fund really awarded the SIP investors.
SBI Magnum Midcap Fund
Salute to the fund manager of this fund. Despite a midcap fund, the beta of the fund is 0.85. It is great and makes the fund very secure. The investment style of this fund is not to take excessive risk. It has given very good return during last five years. The return of SIP investment was far better.
This Hero of Equity Linked Saving Schemes featured in this list as well. Low volatility, low risk and High return. All this benefit along with the tax saving. The SIP return is comparable to the lump sum.
SBI Bluechip Fund
Again A large-cap Fund has come as the frontrunner. Despite taking a low risk and low Beta, the fund managed to give 20% annual return during last 5 years.
Mirae Asset Great Consumer Fund
The mutual fund scheme focused on the consumer goods. Because of this strategy, this fund was least volatile. You can consider it safest equity mutual fund scheme. However, it managed to give about 20% average return during last five years.
This post was about the best SIP investment plan of equity mutual funds. But, if you want to good return along with the tax benefit, you must go through the best ELSS fund to invest in 2017.