SIP in Equity Funds - the road to wealth

Dear Investor,

 

Have the domestic markets peaked? Are we set to witness the benchmark indices scale new heights soon? Is a correction in the offing? These are some of the questions haunting the investor community for quite some time now. Such questions appear to be quite straight forward and simple but unfortunately, the answers are not. This is primarily because we have had a massive rally in equity markets since the lows tested in March 2009 on the back of robust FII inflows which have crossed $20 bn in 2010. In such a scenario, what are the options available to small and conservative investors? Do they have to completely avoid equity markets now? Left with few options, do they only have to rely upon fixed income products? Well, the answer is a resounding NO.  Investors do have an option to reap the huge potential of equities while assuming limited risk and thereby enjoying optimal returns. This can be conveniently achieved through the Systematic Investment Plan (SIP) route offered by the mutual funds 

Illustration of the benefits of SIP in few top mutual fund schemes: 

The following table clearly shows how investments through SIP (say Rs.5000 every month) have outperformed one time investments from Jan 2008 to Oct 2010 – the period over which the domestic equity markets virtually completed a cycle of rise and fall. We have considered few schemes (growth option) with a consistent track record of performance under large, mid, diversified, tax planning and sectoral equity categories. The list is merely indicative and not exhaustive.

 

SCHEME NAME	CURRENT NAV	TOTAL UNITS	TOTAL AMOUNT	PRESENT VALUE	YIELD (%)	PROFIT   (SIP)	PROFIT        (ONE TIME INVESTMENT)
Canara Robeco Equity Diversified	58.96	4,669.03	170,000	275,286.09	38.37	105,286.09	29,268.39
ICICI Prudential Taxplan	152.58	1,896.60	170,000	289,383.74	42.76	119,383.74	32,566.18
Reliance Banking Fund	117.14	2,961.13	170,000	346,866.89	59.38	176,866.89	120,077.20
S&P Nifty	6,135.85	39.47	170,000	242,173.43	27.49	72,173.43	-582.43

                                                                                                                                                                                                            Source: MFI Explorer

Please contact us for more details on the benefits of SIP and suggestions for other equity schemes which can be considered. You can also reach us by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm.  

Regards, 

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com