Markets have gained significantly from levels of 29,000 to the current levels of 31,000 points on the Sensex. However, those investing in SIPs would not be bothered too much, as SIPs work on the law of averages, since you are buying every month. Here are a few long term generating SIP ideas.
SBI Blue Chip Fund
You can start by investing a small sum of Rs 5,000 initially, which will begin your SIP at SBI Blue Chip Fund and thereafter you can invest in small sums of Rs 500 each month. The Fund has a very low expense ratio of 1.97 per cent, which makes it a very good proposition. If you are investing now, you need to invest at a net asset value of Rs 34.92, while under the dividend plan you can invest at Rs 19.87. It is advisable to invest in the dividend plan, as dividends are tax free in the hands of the investor SBI Blue Chip Fund has a sound portfolio that includes the likes of HDFC Bank, Larsen and Toubro and Mahindra and Mahindra.
Why to invest in SBI Blue Chip Fund?
For starters, this fund has beaten returns of most of its peers in the last three years. In fact, the returns for the fund has been close to 20.51 per cent on an average each year in the last 5 years. This is almost double of what you would have otherwise got in a bank deposit. The fund has a solid portfolio including the likes of HDFC Bank, Reliance Industries and UPL. We believe that the portfolio is well geared to yield good returns in the coming years. The fund is hence a good bet from the current levels. The fund has in the past been rated No 1 by Crisil and we believe that it is well positioned to achieve that position.
Birla Sun Life Top 100
Birla Sun Life Top 100 has generated slightly lower returns as compared to SBI Blue Chip Fund. The net asset value of the fund under the growth plan is Rs 52.98, while the NAV of the fund under the dividend plan is Rs 18.31. Remember, that the dividend plan is tax free. You can start an SIP plan under the scheme with a sum of Rs 5000 and then invest in small sums of Rs 500 every month. This is a good scheme to invest in. Value Research Online has accorded a 5-star rating to the fund.
Returns from Birla Sunlife
Birla Sunlife has in the past given a superb set of returns. The three year returns from the fund is slightly over 15 per cent. This is a little lower then the returns that SBI Blue Chip Fund offers. The expense ratio at 2.12 per cent, is much better than of some of its peers. The portfolio of the fund is geared for good returns with stocks like HDFC Bank, ICICI Bank and Infosys. One can look at investing in the fund in a more systematic way through SIPs.
Quantum Long Term Equity Fund
Quantum Long Term Equity Fund is a good bet, if you are looking at more of a long term systematic investment plan. The assets under management are not very large and slightly in excess of Rs 615 crores. What we wish to emphasize about this fund is that there is a heavy exit load, if you exit the fund early. For example, there is an exit load of 4 per cent, if you exit before six months. So, you need to be careful, if you are exiting early. The net asset value of the fund is Rs 49.49 under the dividend plan.
Superb 5-year returns
The returns of the fund has been good in the last 5-years, with close to 17.68 per cent. On the other hand, the three year returns has been still better at almost 14 per cent. The fund has done well in the past and we believe that it has the potential to generate further returns.
ICICI Prudential Focussed Blue Chip Fund
This is another fund that has shown a respectable performance in the last few years. You can invest in the fund through a small amount of Rs 500, after initially investing Rs 5,000. The fund has generated a returns of 15.37 per cent in the last three years, on an average, which is pretty decent. The net asset value under the dividend plan is Rs 22.48, while if you are looking at the growth option you need to invest at Rs 35.73. Not a bad bet at the current levels for those looking at investing. The fund like peers has companies like HDFC Bank and ICICI Bank as the top in its portfolio.
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 shares in the above mentioned stocks.