One of the most popular investments in the country at the moment are Systematic Investment Plans (SIPs). According to data from the Association of Mutual Funds in India, there are more than 2500 mutual fund schemes, often leaving investors confused on which funds to invest when making a selection.
You can’t always get the perfect SIP?
Having said that, you can never get the perfect mutual fund over a long period as market dynamics change quickly. For example, a top performing fund today may no longer be a top performing fund, a couple of years from now. Let's say that a fund reaped the benefits of heavily investing into banking stocks a year back, but, 2 years from now economic growth takes a hard landing. The fund will start underpeforming as banking stocks start falling. Similarly, if a fund has heavily invested in IT on hopes of a sharp turnaround in US economic activity, should the economic activity falter, we could see IT stocks take a knock. The fund performance really depends on which way the top 10 stocks of the portfolio are skewed. In any case, we give you two investment ideas, to invest through SIPs.
Axis Bluechip Fund
We are suggesting Axis Bluechip Fund, because this fund has been rated 5-star by Crisil, Morningstar and Value Research. We have seen this rating being there for some years now, which makes it a relatively consistent performer over the years.
We have been emphasizing for some time now, that investors should only invest through the SIP route. It makes no sense to invest large amounts, when the Sensex is at 53,000 points. In any case, Axis Bluechip Fund has given a returns of 40% in 1-year, while the 3 and 5 year returns are pegged at 14% and 16% respectively. An SIP in Axis Bluechip Fund can commence with a sum of Rs 500 every month, while the initial amount for beginning and investment is Rs 1,000. Axis Bluechip Fund is a largecap fund and when the markets at a record, no investment expert would want to recommend a small cap fund. With assets under management of Rs 28,333 crores, Axis Bluechip Fund is not a small fund in terms of assets under management.
Edelweiss Large & Mid Cap Fund
This fund has been another decent performer over the years, with a 5-star rating from CRISIL. Unlike Axis Bluechip Fund, the assets under management are not large, with a smaller size of just Rs 833 crores. Smaller size funds maybe more nimble that way, in the sense when you want to quickly churn your portfolio it becomes easy for the fund manager.
This fund was launched way back in 2007 and since then has given a returns of almost 12% on an annualized basis since its launch.
Edelweiss Large & Mid Cap Fund has exposure to stocks like Infosys, ICICI Bank, HDFC Bank, State Bank of India and Reliance Industries. This is the trend in most of the funds, where the above stocks have to almost always be there.
An SIP in the fund can commence with a sum of Rs 500 every month. Please be informed that a 5-star rating does not guarantee returns and we are just highlighting what some of the agencies have given. However, it has been noticed over the years, that long term investors have reaped good gains from investing over a long period of time, including by way of SIP investment.
Mutual Fund investments are risky and investors are advised to invest only if they are able to take losses. Neither the author, nor Greynium Information Technologies would be responsible for any losses incurred based on the above article.