The best mutual funds for SIP Investments

Recent years have seen a marked shift in the investing habits of Indian's who are open to exploring other wealth creation avenues rather than going for traditional investment options. Mutual funds hence have emerged as a top choice, appealing to the sensibilities of a wide range of investors due to their features. While investment in mutual funds can be done in a lump sum mode, the systematic investment plan or SIP has emerged as the preferred route, owing to its simplicity.

What Is A Systematic Investment Plan?

As the name suggests a SIP encourages you to invest systematically. The functioning is simple; you start a SIP in the mutual fund of your choice, set the monthly SIP amount and a particular start date.

Every month on the date you have selected, the set sum will be auto-debited from your account and will be directed to towards the mutual fund scheme you have chosen. Going the SIP route hence inculcates the habit of disciplined investing, ensuring your investments are always prioritised. Consequently, it keeps you steady on the path of achieving your long or short term financial objectives.

Systematic investment plans also ease the burden on the pockets of investors as you can start with a sum as low as Rs 100 each month rather than having to shell out lump-sum amounts. This is yet another reason adding to the popularity of SIP as the preferred investment option. You can then top up the SIP amount every year as per your needs to further accelerate wealth accumulation.

The best way to calculate what your monthly SIP amount is by using a SIP calculator. SIP Calculator is a free tool that tells you how much corpus you will accumulate at an expected rate of return after an investment tenor. All you have to do is feed the input values and the results are generated within seconds. This tool gives you an excellent estimate of how much your monthly SIP amount should be and hence you can make adjustments accordingly. Let us now see some more benefits and features of SIP that work in its favour.

why SIP is the best route to invest in mutual funds?

Mutual fund investors with high-risk appetite invest in equity-oriented mutual funds to get higher returns. Most financial pundits or experts and a large number of investors prefer investing in equity mutual funds through SIPs. SIP investments work for the following reasons:-

1. SIPs are light on the pocket, as it allows you to start with smaller amounts. The power of compounding magnifies this small regular investing to create large corpus over time.

2. SIP protects against market volatility, investing monthly averages out the purchase price and hence spreads out the risk of investors.

3. SIP is a great way to inculcate financial discipline. Since money gets auto-debited each month, you don't have to worry about not saving enough for your investments. SIP ensures your investments are prioritised over other money outflows.

These are some obvious benefits of opting for a systematic investment plan over the lump sum mode. With the SIP calculator, you can adjust the other variables like tenor to come at an optimal SIP amount for the corpus you want to create. Every year, there are top-performing funds that can be considered as the best mutual funds in India to invest in via SIP that you can choose to invest in. Some of them have been mentioned below, let's take a look.

Best mutual funds for SIP investments

The best SIP mutual funds are selected based on how well they have performed in the past. These have further been segregated based on long term and short term investment objective.

For Long term

1. Axis Bluechip Fund

This Large-cap fund is perfect to achieve long term capital appreciation by investing in a diversified portfolio consisting mostly of equity and equity-related securities of Large Cap companies including derivatives.

Launched on 10 January 2010, this fund has given 12.46% returns since its launch.

2. ICICI Bluechip Fund

Considered as one of the best mutual funds in India, this large-cap mutual fund was launched on 23 May 2008. It is a fund with moderately high risk and has given a return of 13.76% since its launch.

3. Mirae Asset Emerging Bluechip Fund

This is a Large-cap and Mid-cap Mutual Fund launched on 1 January 2013. It is a fund with moderately high risk and has given a return of 20.32% since its launch.

The fund has the leeway to invest up to 35% of assets in the top 100 companies by market cap, with 65% parked in mid-cap stocks.

For Short term

1. ICICI Liquid Fund

This is a debt-oriented mutual fund launched on 17 November 2005. It is a fund with very low risk and high liquidity and has given a return of 7.81% since its launch.

2. HDFC Corporate Bond Fund

This is a debt-oriented mutual fund which invests only in corporate bonds and was launched on 29 June 2010. It is a fund with very low risk and high liquidity and has given a return of 8.83% since its launch.

3. Franklin Ultrashort Duration Fund

This fund is one of the best debt mutual funds available in the market right now. It has given a return of 8.94% since its launch on 18 December 2007.

Conclusion

Though the benefits of SIP are immense, it finally boils down to your risk appetite and convenience as an investor. Don't forget to conduct the due diligence regarding each fund before you invest and keep reviewing your investment strategy and portfolio periodically.