Which SIP Funds Are The Best To Invest In 2016?

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With inflows into mutual funds rising substantially, many individuals are looking at continuing to invest through the Systematic Investment Plan Route or SIPs, as they are popularly known. There are many plans that you can invest in. But, we have shortlisted some of the below, based on the following criteria.

1) Portfolio of the fund

2) Returns in the past

Which SIP Funds Are The Best To Invest In 2016?
There are many individuals, who have various other parameters, but, we have chosen, portfolio as the single most important reason for choosing the below.

Birla Sun Life Equity Fund

Under Birla Sun Life Equity Fund, you can invest a small amount of Rs 1000 per month under SIP. Since launch in 1998, the fund has given a return of almost 25 per cent. But, that is not the only reason to invest in the fund. The most important is the portfolio of the fund.

 Returns from Birla Sun Life Equity
1 year returns3-year returns5-year returns
-4.36%17.00 per cent10.20 per cent

At the moment, the fund has a portfolio that comprises HDFC Bank, Maruti, Infosys and ICICI Bank, which account for almost 18 per cent of the portfolio.

In fact, Maruti and HDFC Bank form almost 10 per cent of the portfolio. This makes the fund interesting, because HDFC Bank is a solid stock to own, given the fact that its NPAs are negligible and it keeps growing at 20-25 per cent every quarter.

Maruti has been a Sensex out performer this year and with a spate of new launches, the company is likely to continue to grow at a scorching pace. This makes the portfolio very interesting, which is why we pick the Birla Sun Life Equity as the best SIP to invest in 2016.

The fund has given decent returns in the past, though, the one year returns has not been impressive given the drop in the indices in the last one year. However, not too much weightage should be attached to the past returns, given that past returns is no indication of future performance.

ICICI Prudential Dynamic Fund

Like Birla Sun Life Equity Fund, one can invest a small sum of Rs 1000 each month, in the ICICI Prudential Dynamic Fund. The 3 year return from the fund has been close to 21 per cent, while the 5 year return has been close to 10 per cent.

ICICI Prudential Dynamic Fund
1 year returns3-year returns5-year returns
2.35 per cent21 per cent10 per cent

Once again we like the portfolio of the fund. Almost 21 per cent of the portfolio comprises three stocks: Power Grid, HDFC Bank and Tata Motors.

All the three stocks are great portfolio bets. In fact, Power Grid, in which the fund has the largest holdings, is likely to benefit from the government's recent initiatives in the power sector.

Tata Motors on the other hand has seen a good recovery in its share price, as demand for the company's JLR vehicles continues to rise in the US. A spate of launches in the next two years, makes the shares a good bet. This means that any rise in the stock prices of the above three, will lead to good rise in the NAV of the fund. This makes the fund one of the best SIPs to invest in for 2016.

Disclaimer: This article is strictly for informational purposes only. It is not a solicitation to buy and of the SIP schemes or financial instruments mentioned. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article.


Read more about: birla sun life, icici prudential
Story first published: Friday, November 20, 2015, 9:04 [IST]
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