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    Systematic Investment Plan

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    sangnagu
    SIP or systematic investment plan allows investors to invest small amounts in mutual funds regularly by debiting a fixed amount from their bank account each month. It helps reduce risk by rupee cost averaging and takes advantage of compounding returns over long periods. To start an SIP, investors simply need to fill out a form providing bank details for automatic debit and details of the mutual fund scheme they wish to invest in.

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    Systematic Investment Plan

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    sangnagu
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    SIP or systematic investment plan allows investors to invest small amounts in mutual funds regularly by debiting a fixed amount from their bank account each month. It helps reduce risk by rupee cost averaging and takes advantage of compounding returns over long periods. To start an SIP, investors simply need to fill out a form providing bank details for automatic debit and details of the mutual fund scheme they wish to invest in.

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    SIP or systematic investment plan allows investors to invest small amounts in mutual funds regularly by debiting a fixed amount from their bank account each month. It helps reduce risk by rupee cost averaging and takes advantage of compounding returns over long periods. To start an SIP, investors simply need to fill out a form providing bank details for automatic debit and details of the mutual fund scheme they wish to invest in.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    698 views28 pages

    Systematic Investment Plan

    Uploaded by

    sangnagu
    SIP or systematic investment plan allows investors to invest small amounts in mutual funds regularly by debiting a fixed amount from their bank account each month. It helps reduce risk by rupee cost averaging and takes advantage of compounding returns over long periods. To start an SIP, investors simply need to fill out a form providing bank details for automatic debit and details of the mutual fund scheme they wish to invest in.

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    SYSTEMATIC INVESTMENT PLAN

    Presented by

    N.Sangeetha S.Thangam

    It is one of the ways to invest in Mutual Funds. Through SIP we can invest in Mutual Funds in small installments on a monthly basis.

    The investment is done directly by debiting bank account on a specified date and Providing a credit for the units purchased from the amount.

    We can start SIP by filling up a simple SIP form and providing


    bank auto debit Mandate

    Mutual fund schemes are offered by the Asset Management companies (AMC) to customers through a distributor. The Bank acts as a distributor of Mutual Fund products for the AMC to the customers. A customer wants to invest in a mutual fund scheme can avail of the Systematic Investment Plan option through Axis

    Bank.

    Power of Compounding
    SIP helps to start investing at an early age to meet the greater expenses of the life. Saving a small sum of money regularly makes money work with greater power of compounding with significant impact on wealth accumulation

    Rupee Cost Averaging


    SIP minimizes the effects of investing in volatile markets. It helps to average out the cost by generating superior returns in the long run. It reduces the risk associated

    with lump sum investments. Since you get more units when the NAV drops and
    fewer when it rises.

    Convenience and Regularity SIP gives the convenience to pay through Axis Bank Electronic

    clearance service (ECS) or Auto Debit. We can decide the amount


    and the mutual fund scheme. A fixed amount will automatically get debited from the account on a date specified by us.

    Disciplined approach towards investment


    Since we invest regularly, it makes us disciplined in our savings, which leads to wealth accumulation. Disciplined investing is vital to earning good returns over a longer time frame

    Step 1:

    Select a mutual fund scheme of our choice with the payment option as
    SIP. Step 2: Decide the Investment periodicity (frequency of making payments). We can choose to make our investment on a monthly or quarterly basis. Step 3: Select the minimum investment amount

    Step 4:

    The amount gets converted into units, depending on the Net Asset
    Value (NAV). NAV is the market value per unit of a fund. Step 5: The units get accumulated over a period of time. We can stay invested till the time you wish and redeem our units when we wish

    to exit from the scheme. The units are redeemed at the market value
    (NAV) and we get back our money with returns.

    Best Systematic Investment Plans in India


    Mutual Fund 3 Years 5 Years 10 Years 12 Years Investment 36000 Investment 60000 Investment 120000 Investment 144000 Scheme Name
    Amount Amount Amount Amount

    Birla Sunlife Equity Fund DSP BR Equity Fund Franklin India Blue Chip Fund HDFC Equity Fund HDFC Top 200 Fund

    51990 (26%) 55142(30%) 54785(28%)

    92033(17%) 103852(22%) 98935(20%)

    570925(29%) 656368(32%) 549491(29%)

    847695(27%) 890730(28%) 860441(27%)

    61979(39%)
    57909(34%)

    112626(26%)
    109045(24%)

    721916(34%)
    706670(33%)

    1142897(32%)
    -

    Mutual Fund

    3 Years

    5 Years

    10 Years

    12 Years

    Scheme Name
    ICICI Prudential Growth Fund Reliance Growth Fund Reliance Vision Fund

    Investment 36000 Investment 60000 Investment 120000 Investment 144000 Amount Amount Amount Amount 51186 (25%) 54014(29%) 51789(25%) 90158(16%) 100716(21%) 91941(17%) 437115(25%) 901404(38%) 677154(31%) 616589(22%) 1407815(35%) 1078457(31%)

    SBI Magnum Global 54249(29%) Fund


    Sundaram Growth 50576(24%) Fund Tata Pure Equity Fund 52625(29%)

    88337(16%)
    88069(15%) 95385(19%)

    607379(25%)
    458342(25%) 554004(29%)

    793162(26%)
    617858(22%) 727228(25%)

    EXAMPLE

    Inculcate financial discipline

    Helps us make investment our first priority from it being our last
    priority.

    Average out your cost of investment and hence reduce your risk If we invested Rs 1000 every month. And lets say the scheme invested in is available at a rate of Rs 20 per unit. Then in month 1,

    you will be able to obtain 50 units. In month 2 if the unit value goes
    down to Rs 10 then you will be able to obtain 100 units.

    Helps in compounding your wealth


    ( Start Early + Invest Regularly = Create Wealth)

    Invest Regularly Systematic investing has a compounding effect on the investments. In the long term, an investment as low as Rs 1000/- per month swells

    up into a huge corpus.

    Start Early Starting your investments early has its own advantages. Starting early means that the power of compounding starts acting on your money earlier thereby generating higher returns.

    Invest Regularly

    Start Early

    Investment in equity mutual funds or unit linked insurance should always be done in SIP mode We cannot invest a lump sum in the same account in which you are doing an SIP If one miss investing for a particular month, will they prosecute them? SIP is only for small investors Market is at very high level to start an SIP If SIP in a tax plan is done, can we withdraw all the money on completion of 3 years?

    The Top 10 SIP Plans in India are:

    Religare Mid N Small Cap Fund - Growth


    DSP Black Rock Small and Midcap Fund - Growth

    SBI MSFU Emerging Business Fund Growth


    HDFC Midcap Opportunities Fund - Growth UTI Master value fund - Growth ING dividend Yield Fund - Growth

    Religare Midcap Fund - Growth

    Canara Robeco Emerging Equities - Growth


    Reliance Equity Opportunities - G

    BNP Paribas Future Leaders Fund - G

    1. In rising markets An SIP may not be able to lower the average purchase cost if equity markets rise in a secular manner. In such a scenario, the

    average purchase cost could actually rise. So in a market rally,


    SIPs could prove to be more expensive vis--vis a lump sum investment.

    2. A directionless SIP

    A directionless SIP is one that does not form part of an

    investment plan; in other words, its an aimless SIP. The SIP is


    not an end; instead, it is the means to achieve an end. Hence an SIP in isolation does not make financial sense.

    3. An SIP in a poorly managed fund

    Investing via an SIP doesnt improve the prospects of a poorly

    managed fund. Such a fund stays the same, irrespective of the


    investment mode. Its shortcomings will not be eliminated by an SIP.

    SIP is a way of investing in Mutual Funds.

    Mutual Fund is a collection of stocks, which a Mutual Fund House


    offers.

    When thousands of investors invest in that fund, a large sum of money is collected, which the fund manager invests.

    Depending on the performance of various sectors (say IT, Manufacturing,

    Services, Banking) fund manager keeps investing money.

    All that information is usually sent in the annual report of the company.

    If we choose to invest Rs. 50,000 in a Mutual Fund and if we don't


    have that amount of money and can spare only Rs. 5000 a month, you can go for SIP...where you can invest a certain amount every month in that fund or every quarter.

    SIP is boon for people who have just started earning and want to start investing early.

    But one of the biggest problem with SIP is that they have to invest every month even if the markets are down.

    There is no way out of that. That's why many people believe SIP is a
    sham.

    Never put all the money in one company. Diversify.

    Never be greedy. Set a target. If the company's stock value


    reaches that, sell it. Never let our life savings depend on it. Invest only that amount, which if we lose, will not affect us greatly. Keep stock market investment for a short term. Don't look at it as an investment for years.

    Figures are in Dollar($) but it can be treated in Rupees.

    In Compounding Keep it Annually


    Notice in last years how fast assets grow.

    Try 2 things to check impact of Power of Compounding:


    Take interest 5%(Insurance Endowment Plans), 8%( debt investments) & 12-15%(Diversified Equity Mutual Funds)

    Take 15 Years & 30 years

    SIP CALCULATOR SIMPLE SAVINGS CALCULATOR Starting balance($): Monthly Deposit ($): Interest rate (%): Compounded: Number of years:

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