Mutual funds SIP is the most coveted route in the current times and as per the June AMFI data the total number of SIP accounts are at 4.02 crore or 40.2 million. Precisely SIP or systematic Investment Plan is widely known and involves disciplined investment of some pre-decided amount into a scheme at regular intervals generally on a month on month basis. The major benefit offered through the investment option is rupee cost averaging which is offered through averaging of cost when the markets are down and investor is able to secure mutual fund units at a lower NAV.
So, far as per the AMFI data, SIP contribution for the ongoing FY 2021-22 is at Rs. 26,571 crore, while it had been at Rs. 96,080 crore for the previous financial year ended March 31, 2021.
1. Nippon India Nivesh Lakshya Fund:
This long duration fund can be invested by millenials who have their financial goals long ahead say for instance retirement planning. Indeed the investors in these funds need not be impacted by interest rate movement.
The fund's investments are into government papers hence no risk element. Typically the bonds come with a maturity of 23-25 years and all of the gains are reinvested into similar investments. Primarily the portfolio includes government bonds maturing in 2042, 2044, 2045 and 2046.
This fund commands a substantial AUM of Rs. 1789 crore and further has a lower expense ratio of 0.52%. The fund carries a moderate risk as per the risk is moderate. SIP route in the fund is suggested as there are interest rate risk going ahead so staggered investment in the fund shall be best. The fund is also suitable for those investors who do not want credit risk with their funds.
This can be a good investment option in comparison to RBI floating rate bonds that yield a post tax return of 5.5%. Notably SIP in the above plan or debt scheme can be started for as less as Rs. 100.
|Long duration fund||SIP return in 1 year (in %)||SIP return in 3 year (in %)||SIP return in 5 year (in %)|
|Nippon India Nivesh Lakshya Fund||-2.47%||3.43%||7.27%|
2. Mirae Asset Emerging BlueChip Fund-Growth:
This mutual fund from the house of Mirae AMC is a large and mid cap fund with an AUM of Rs. 18,675 crore. The fund is CRISIL 5-Star rated and is categorized to be very high on risk as per the risk-o-meter. Expense ratio of the fund is at 1.66% that is indeed lower than the category average.
With prime investments into large and mid cap stocks the fund aims to provide capital appreciation. Over the long tenure of say 10 years, the SIP annualized return have been at a good over 24%. The top holdings of the fund include ICICI Bank, HDFC Bank, Infosys, Axis Bank, SBI, Bharti Airtel, TCS etc.
Through participation in the India growth story over the long run, individual investors will be able to make significant gains over the long run. Primarily emerging companies that have the potential to turn into bluechip names works well.
The investment approach is bottoms up approach: driven by value investing, in growth oriented businesses.
Other key points integral to the fund
Benchmark of the fund is Nifty Large Midcap 250 (TRI)
Fund managers are Mr. Surana and Mr. Ankit Jain
Direct plan of the scheme entails an expense ratio of just 0.68%
So by taking on to this investment bet for a longer term, the fund may be able to generate alpha over sufficient longer tenure through exposure to mid caps. Also, the large cap portfolio provides stability to the holdings with no major fluctuations. Here the SIP invested can be kick-started for Rs.1000.
|Fund||SIP return in 1 year (in %)||SIP return in 3 year (in %)||SIP return in 5 year (in %)|
|Mirae Asset Emerging BlueChip Fund-Growth:||61.52%||33.32%||23.42%|
The story listed here is only for informational purpose. Mutual fund investment is risky and one needs to engage in his or her own research and look for professional advice before betting on any of the investment product.