Top 5 Mutual Funds For SIP To Invest In 2018
Description
Systematic Investment Plan is a mode of investing in Mutual Fund. You invest fixed sum at regular interval for a long period of time, typically 10-15 years. The SIP investment methodology is immune from market fluctuations on the contrary it capitalises on this volatility. If market goes down you get more units for your fixed amount invested and if market goes up all the units get valued at the current prices. Therefore if market is up or down it does not matter so long as you are investing through SIP mode.
If you have not started SIP it is time to start today irrespective of the market levels. The selection of funds for SIP depends on various parameter like risk appetite, age, specific goal for starting SIP, time to retire etc.
Here are the top 5 mutual funds to start your SIP, this is an Aggressive Portfolio of mutual funds.
1. Franklin India Smaller Companies Fund (G)
Category: Small Cap
Launch Date: January 2006
Asset under management: ₹7487cr
Return since Inception: 16.66% return per annum.
Being small and midcap segment fund, it is risky which could manifest in terms of long patches of low returns and patches of very high returns. The fund manager selects a company for investment only after intensive research and due diligence. The focus is on investing in quality companies with low leverage, healthy Return on Equity, free cash flows, and consistent growth. The fund avoids companies that don’t have an established track record. For liquidity management, the fund manager invests around 15% of the portfolio in large-cap stocks and up to 10% in cash.
Given the volatility which could be short or long lived, the SIP investor should not panic and withdraw or stop SIP otherwise one will miss the opportunity to amass more units during this phase.
Performance:
1 year return: 34.60% per annum
3 year return: 18.39% per annum
5 year return: 29.90% per annum
A SIP of ₹1000 per month started on 16th January 2006, inception, would equal investment of ₹1.44lakhs and its value as on 23rd, Jan 2018 would have been ₹6.16lakhs, a SIP return of 22.23% per annum.
Risk:This is a moderately high risk fund and it would have patches of very low growth and patches of high growth.
2. Birla Sun life Equity Fund –Growth
Category: Flexi Cap
Launch Date: August 1998
Asset under management: ₹8538cr
Return since Inception: 24.83% return per annum.
One of the oldest fund in flexi cap category. The fund caps its exposure to small and mid-cap to 30-40% of the corpus. The investment is made across small, mid, large and giant caps equity stocks. The stock selection is top down approach, sector selection followed by company selection based on certain differentiator for the company in the selected sector.
This is typical fund which will benefit from all the sizes of the companies based on macroeconomic environment and selected company’s specific growth stories.
Performance:
1 year return: 25.64% per annum
3 year return: 14.89% per annum
5 year return: 21.88% per annum
A SIP of 1000 per month started on 30th August 1998, inception, would equal investment of ₹2.33lakhs and its value as on 23rd, Jan 2018 would have been ₹26.16lakhs, a SIP return of 21.16% per annum.
Risk:This is a moderately high risk fund and it has relatively higher variation in returns although it has consistently delivered high returns.
3. L&T Midcap Fund–Growth
Category: Mid Cap
Launch Date: August 2004
Asset under management: ₹2036cr
Return since Inception: 22.40% return per annum.
This fund is Mid-Cap focussed equity fund and invests in all medium sized companies in high growth sectors, the stock selection in mid cap category is based on growth and economically favourable sector.
Performance:
1 year return: 42.71% per annum
3 year return: 21.01% per annum
5 year return: 29.35% per annum
A SIP of 1000 per month started on 30th August 2004, inception, would equal investment of ₹1.62lakhs and its value as on 23rd, Jan 2018 would have been ₹7.5lakhs, a SIP return of 21.08% per annum.
Risk:This is a moderately high risk fund and invests in midcaps only.
4. Reliance Top 200 Fund Growth plan
Category: Large Cap
Launch Date: August 2007
Asset under management: ₹7170cr
Return since Inception: 12.6% return per annum.
The fund has moved from pure large cap to top 200 equity by market cap. This allows manager to take a deviation and pick growth companies. The fund takes sector exposure in line with BSE 200 and deviates only in case of sound track record of company and visible long term trend of a sector.
Performance:
1 year return: 37.14% per annum
3 year return: 11.87% per annum
5 year return: 18.63% per annum
A SIP of 1000 per month started on 30th August 2007, inception, would equal investment of ₹1.26lakhs and its value as on 23rd, Jan 2018 would have been ₹3.1lakhs, a SIP return of 17.38% per annum.
Risk:This is a moderately high risk fund being an all equity fund.
5. Sundaram S.M.I.L.E Regular Plan
Category: Small Cap
Launch Date: February 2005
Asset under management: ₹1481cr
Return since Inception: 20.5% return per annum.
The focussed small cap mandate makes this fund aggressive in profile. The fund tries to catch tomorrow's large-caps very early. It also diversifies across the sectors with limited exposure to a single company. The fund manager tries to take advantage of cyclical upturns in companies and sectors and also prefers niche businesses. The fund has a stellar long-term track record.
Performance:
1 year return: 42.75% per annum
3 year return: 17.05% per annum
5 year return: 27.80% per annum
A SIP of 1000 per month started on 30th February 2005, inception, would equal investment of ₹1.56lakhs and its value as on 23rd, Jan 2018 would have been ₹6.7lakhs, a SIP return of 20.58% per annum
Risk:This is a moderately high risk fund being an all equity small cap fund.