Top 5 Trending SIPs for FY 2022-23
Systematic Investment Plans (SIPs) are a disciplined form of Mutual Funds or Stock Investments. They are one of the two ways one can invest in mutual funds. SIPs are known to automate the whole investing process for investors and inculcate the habit of thrift amongst the new ones.
What SIPs do, is make a fixed investment as per the set date irrespective of the market ups and downs. This helps you in saving from the concept of timing of the markets and minimizing the unpredictability of the markets in the short–term. You do not have to be actively involved in the markets for investing, as in the case of a lump sum investment.
What Are the Advantages of Investing in SIP?
- Power of Compounding
This is the most lucrative advantage of having a SIP. When you invest consistently through SIPs, you give a boost to the power of compounding. This is because when you invest regularly, over a long period, your returns too are being reinvested indirectly back into the fund. This re-investment has a small effect in the initial years but after regular investments, you will notice its sizable effect, on your portfolio.
- Cost Averaging
SIPs being systematic gives you the benefits of cost averaging in the long term. When the markets are low, the SIP will yield you more units, thereby greater returns when the market stabilizes and shots up over time.
- Hassle-Free Investing
SIPs are coupled with automatic e-mandates with your bank account. This means that the amount you set is automatically deducted from your bank account and invested on the date as chosen by you. You do not have to worry whether investments are being made or not.
- It is Flexible
Investing in SIPs provides an investor with all the flexibility they can wish for. They can start or stop investing in SIPs whenever they wish meaning the fund house doesn’t control their decision. Also, if the investor is going through a difficult phase financially, they can put a hold on their SIP for some time. The best part is that all of this costs nothing at all!
- You can Start Small
An investor might find it difficult to invest in some schemes only because of the fact they require a large sum of money to start investing. This is mostly because a new investor might not be willing to take that kind of risk at the beginning of the journey. In the case of SIP, the standard minimum amount to start investing is ₹500 whereas there are other funds that allow you to start with ₹100 per month even.
What Are the Top Trends for FY 2022-23?
Here we bring to you a list of some of the best SIPs you can invest in which have the capacity to foster your money and provide you with a good return. Let’s take a quick look at them.
- BOI AXA Tax Advantage Fund
When it comes to the list of some of the top funds to invest your money in, the BOI AXA Tax Advantage Fund has to be one of them. According to a report presented by CRISIL, this fund has provided an impressive 14.58% returns on investments made in the past six months and a staggering ROI of 42.6% in the last twelve months. If we take into account the ROI that BOI AXA Tax Advantage Fund provided in the last 3 years, it still manages to impress and attract investors with a 28.07%.
- ICICI Prudential Technology Fund
The next impressive fund down the list is the ICICI Prudential Technology Fund with an ROI of 42.1% in the last three years. The best part of this SIP is its minimum investment of ₹100. This makes it easy for a new investor or an investor who doesn’t have much to invest in this fund. The NAV of this fund is ₹163 and the Net Assets for the fund is ₹6887 crores. Another impressive detail of this fund is its expense ratio which is 1.84%. It is because of all these factors that CRISIL has given this fund a 3 star.
It is to be noticed that as a result of the pandemic, the IT sector has witnessed immense growth. And this is the reason why IT stocks have provided the best returns. The top 5 holdings of the ICICI Prudential Technology Fund are HCL Technologies Limited, Infosys Limited, Persistent Systems Limited, Tech Mahindra Limited, and Tata Consultancy Services Limited.
- IDFC Tax Advantage Fund
The report generated by CRISIL presenting the performance of the IDFC Tax Advantage Fund has managed to blow minds. As per the report, the fund managed to generate an impressive ROI of 12.68% in the past 6 months and a smashing 48.98% over the past year. The fund’s performance stood at 21.6% over the period of the last 3 years.
- Aditya Birla Sun Life Digital India Fund
As mentioned earlier, as a result of the COVID-19, the market concerning digitalization and technology has got a good boost. Along the same lines, we introduce you to another digital-related fund- the Aditya Birla Sun Life Digital India Fund.
Talking about some recent facts about the same; the fund has generated an ROI of 40.5% in the last 3 years. The NAV is ₹140, the Net Assets are ₹2658 crores, and the Expense Ratio is 2.19%. The minimum investment to be made in this fund is ₹1000. Because of these impressive data, CRISIL gave it a 4 Star.
The target allocation of this SIP is 100% equity and it focuses specifically on sectors such as telecom, e-Commerce, internet, hardware, software, media, and technology. The top 5 holdings of the Aditya Birla Sun Life Digital India Fund are Bharti Airtel Limited, HCL Technologies Limited, Infosys Limited, Tech Mahindra Limited, and Tata Consultancy Services Limited.
- Union Long Term Equity Fund
The Union Long Term Equity Fund is one of the few funds that have managed to earn a 5 Star by CRISIL. The fund generated an ROI of 14.83% in the past 6 months, whereas it stood at 38.06% for the past one year. If you study its performance for the last 3 years you will find that the fund has been able to generate a return of 21.97% on investment. And this is undoubtedly quite impressive!
These are some of the funds, we believe will be offering maximum returns in the coming years. There are many types of research available in the market that can educate you for your investing journey. However, nothing beats the expertise of a financial planner. These individuals can better handle SIPs and all other forms of investment and money-related decisions.
You just have to tell them your monetary goals and the rest will be taken care of by their experts. This is because “Mutual Fund Investments are subject to Market Risks”.