With markets at record highs the best way to invest would be through the SIP route. Staggered investment is the ideal way to invest at times when the markets are at a new record.
Investors need to be circumspect when the markets have hit record highs, book profits and invest through the SIP route. Here are 4 SIPs that you can start which have a 5-star rating from Morningstar. The firm does great research on mutual funds and provides valuable data and insights for discerning investors.
Axis Flexi Cap Fund
Flexi Cap Funds are equity mutual fund schemes that invest the assets under management in a portfolio of equity and equity related instruments across market capitalization. Axis Flexi Cap Fund has been rated as 5-star by Morningstar. The fund has assets under management of Rs 8,600 crores, with almost 96% of this invested in equities.
The stocks in the fund include names like Bajaj Finance, Infosys, HDFC Bank, ICICI Bank and Avenue Supermarkets. Investors can start with a SIP amount of Rs 500 and a minimum investment of Rs 1,000.
The performance of the fund really depends on how the economy functions, given that a lot of the portfolio is geared towards financial stocks. The fund's holdings is slightly different from peers with Bajaj Finance among the top holdings, which you normally do not see elsewhere. The fund has given a 1-year return of 47%, while the 3-year returns is 17% on an annualized basis.
Canara Robeco Emerging Equities Fund
While Axis Flexi Cap Fund invests across market capitalization, Canara Robeco Emerging Equities Fund scheme seeks to generate capital appreciation by investing in a diversified portfolio of large and mid-cap stocks only. This is an open ended scheme with the net asset value at Rs 146.72 under the growth plan. Those investors who are looking at long-term returns can invest in the Canara Robeco Emerging Equities Fund.
This fund has given a returns of 60% in 1-year and an average of close to 17% over the last 1-year. This being a pure equity oriented fund the risk continues to remain very high, which is why the best way to invest is through the Systematic Investment Plan route, whereby a sum of as low as Rs 1,000 can be invested every month.
ICICI Prudential Savings Fund
This is another fund that has been rated 5-star by Morningstar. However, this fund unlike the other two mentioned above invests in a range of debt and money market instruments. This makes the returns and risk low as compared to pure equity mutual funds.
Returns from these kind of funds tend to be slightly better than bank deposits, though not always. We have chosen ICICI Prudential Savings Fund so that investors can balance their risk and also invest in safe mutual fund schemes. The returns from this fund has been in line with bank deposits with 1-year returns of around 5.76% and 5-year returns of 7.56%.
Investors those who wish to go for safety can invest in the ICICI Prudential Savings Fund.
Kotak Low Duration Fund
This fund is for investors who are risk averse and would like to protect their capital. Low duration debt funds invest in bonds maturing in six months to a year. They aim to earn slightly better returns than what you can get from a bank account or a short duration fixed deposit.
Kotak Low Duration Fund has given returns of 4.52% in the last 1 year, while the 3 year returns is 7.22% and 5-year returns is 7.35% on an annualized basis. An SIP in the fund is possible with an investment as low as Rs 500 each month.
We wish to inform readers that we are not recommending investors pump lumpsum money now, given the way equity markets have risen over the last 6-7 months. Please be circumspect before investing, especially in equity mutual funds.
Mutual Fund investing is subject to market risks. One should exercise caution and invest only if he or she is able to bear losses. The above article is for information purposes only. Neither the author nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred on decisions based on this article. Please be careful and consult an advisor before investing.