Systematic Investment Plans (SIPs) allow you to invest small amounts each month, which can be as small as Rs 500. These SIPs have given returns more than bank deposits in the last 3 years and offer you better tax efficiency than bank deposits.
Here are some of the SIPs, which are rated well, have a solid track record of returns and where you can invest a little amount every month. Check declared dividends from mutual funds here
Aditya Birla Sunlife Frontline Equity
This is among the largest equity mutual funds in the country, with sizeable assets under management of Rs 19,000 crores.
The fund does not have an SIP of Rs 500, but, the minimum amount is Rs 1,000. This is one of the top performing equity mutual funds and hence the SIP proposition at the fund is a good bet.
Aditya Birla Sunlife Frontline Equity has generated a return of 18.78 per cent in the last one year and 13.32 per cent in the last three years. The fund has large holding in stocks like HDFC Bank, ICICI Bank and Infosys.
The minimum number of cheques that would be needed to start an SIP is 6. The 5 year returns from the fund has been more or less in line with most other funds.
SBI Blue Chip Fund
This is one of the best performing large cap funds. It has given returns of 13.51 per cent in the last three years, thus beating returns of bank deposits.
You can invest a small sum of as little as Rs 500 per month in the scheme by way of SIP in SBI Blue Chip Fund.
The net asset value under the growth plan is Rs 37.49, while the dividend plan has an NAV of Rs 21.33. The fund has exposure to many blue chip stocks like HDFC Bank, L&T etc., and has a good track record.
The fund has recently increased its exposure to ITC. A decent SIP to consider if you have a monthly disposable income.
It is important to note that dividends from mutual funds are tax free, while capital gains could arise if you opt for the growth plan. One thing that an investor should also remember is that the Sensex has now hit 33,000 points, so SIPs would help protect against downside in the markets.
Reliance Top 200 Fund - Retail Plan
You can invest in the Reliance Top 200 Fund - Retail Plan, with a small sum SIP of Rs 100. Of course, the initial investment needed is Rs 5,000.
The Reliance Retail fund has generated a superb returns of 12.35 per cent on an average each year, in the last three years. The one year returns is still better at around 23 per cent.
The net asset value under the growth plan is Rs 31.90, thanks to the huge uptick the markets have seen this year. The fund has exposure to quality stocks like State Bank of India, ICICI Bank, Infosys and Larsen and Toubro.
Recently, the fund has increased exposure to ITC. This is probably among the few or perhaps the only SIP where the amount is as low as Rs 100.
Investors are advised to take advantage of the same. Most of the funds under SIP have been constantly increasing as investors have very limited avenues to park money given lower interest rates.
SBI Magnum Equity Fund
SBI Magnum Equity Fund is another fund that has given good returns. The fund has generated a return of 14.13 per cent in the last thee years on an average each year. This again is much better than bank deposits and if you opt for dividend distribution the returns are much better than bank deposits.
You can invest a small monthly sum of Rs 500 in the scheme. The net asset value of the fund is Rs 92.68 under the growth plan. Remember, that the dividend plans are more tax efficient as there is no tax on dividends received from mutual funds. The fund has exposure to the likes of HDFC Bank, State Bank of India and HCL Technologies.
In addition it has smaller exposure to Reliance Industries, Kotak Mahindra Bank and Bharti Airtel. Again, the fund being a large cap one is heavily skewed in favour of large cap stocks. A good SIP with a very sound portfolio.
Good solid portfolio
Reliance Focused Large Cap Fund currently has an NAV of Rs 19.98 under the dividend plan and Rs 29.36 under the growth plan. You can invest in the fund with a small sum of Rs 100. The fund has given returns of near 21.16 per cent in the last one year. The expense ratio of the fund is slightly high at 2.20 per cent.
Reliance Focused Large Cap Fund has good holding including stocks like Maruti Suzuki, HDFC Bank, Larsen and Toubro, Indian Oil and ITC. Again, we suggest buying and opting for the dividend plans, because of the tax implications. We have not seen too much in terms of changes in the portfolio, though we must say that it looks very robust.
ICICI Prudential Focused Bluechip Equity
This fund has sizeable assets under management of more than Rs 13,525 crores.
This is another fund where you can invest with a small sum of as little as Rs 500. As for most funds, the initial amount to be invested is Rs 5,000. The fund has generated a returns of as much as 14.38 per cent in the last 3 years. The one year returns is higher at 19.75 per cent.
The fund has top holdings in HDFC Bank, ICICI Bank, State Bank of India, ITC, Maruti Suzuki India and Axis Bank.
ICICI Prudential Focused Bluechip Equity has an NAV of Rs 37.9 under the growth plan and Rs 23.85 under the dividend plan. The portfolio is more geared towards investors who are looking for long term growth. You may want to buy larger SIPs, when the chips are down. At the moment we suggest that you keep your Systematic Investment Plans at modest levels, given that markets have gone significantly higher.
The article is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article. The author and his family do not own any units in the above mentioned mutual funds.