Systematic Investment Plans or SIPs have increasingly become popular among investors. We have listed around 7 funds that are rated as 5-star from Value Research. Investors could consider investing in the same, but, as is well known that past performance or a 5-star rating does not guarantee future returns.
5-Star rated funds from Value Research across categories
|Type of fund||3-year returns (annualized)||5-year returns (annualized)|
|Canara Robeco Bluechip Equity Fund||Largecap||19.99%||17.40%|
|Axis Bluechip Fund||Largecap||18.94%||18.01%|
|Mirae Asset Largecap||Largecap||16.73%||16.75%|
|Axis Small Cap Fund||Small cap||30.76%||23.29%|
|Parag Parekh Flexi cap||Flexi Cap||26.70%||23.12%|
|SBI Magnum Income Fund||Debt Fund||9.95%||8.85%|
|HDFC Money Market||Debt, Money Market||6.58%||6.62%|
We have chosen just seven of the rated funds for SIPs
The list of 5-star rated funds is very exhaustive and we have chosen only a selective. There has been no criteria in out selection, but, only based on inclusiveness from the largecap, small cap, flexi cap and debt funds. We have just picked the 5-star rated funds from across categories from the ratings of Value Research and as indicated before the list is not inclusive of all 5-star rated funds from Value Research. It is not possible to include every fund and maybe in the future articles, we could cover them category wise.
May be prudent to start SIPs in debt as well
With the Sensex on Friday hitting a new historic high of 59,732points, one wonders whether it makes sense to buy into equity even though it is SIP. There was a time one year back if you started an SIP you would have been doing well. To buy now at such high net asset value levels hardly makes sense. Advocates argue that SIPs are the best way to hedge risk, as you can average out should the market fall. That maybe partially true, but, if the markets keep falling for the next six months, you have been averaging out consistently at higher prices. If the markets can consistently be rising over the last 12-months, they can fall too.
In any case, we are advising caution to investors and even if you can start debt SIPs and get nominal returns, you can switch later to equity mutual funds, should there maybe a sharp fall in the markets.
With the Sensex trading at a 23% premium to long term averages in terms of price to earnings multiples, the markets are expensive. In any case, we have provided investors with the options to chose from debt and equity, should they consider to go through the SIP route.
The rating accorded to mutual funds are based on various parameters, including performance, liquidity etc. The mutual funds that have performed during a certain time in the past is not a guarantee of future performance. Note poor rated mutual funds may also perform well in case the market mood turns positive or the stocks or other securities invested into are performing good. Investing in stocks equity mutual funds is risky, we are not endorsing any funds. Greynium Information Technologies, the author and Value Research are not responsible for losses incurred based on the article.