SIP: Funds that turned 6 lakh into more than 15 lakh in last five years
Mutual fund houses in India offer innovative ways of investment to an investor wherein, he can automate his investment to meet his needs from the investment. Investors may choose to invest periodically rather than in a lump sum to benefit from volatility in prices. Systematic investment plans (SIP) is the facility through which he can achieve both, objectives of automating his investment as well as rupee cost averaging.
In a systematic investment plan, investors commit to investing a fixed sum of money at regular intervals over a period of time in a mutual fund scheme. It enables investors to build a corpus over time even with small sums invested. Through SIP, investment is made at different prices over the term chosen and this allows investors to benefit from the volatility in the market. Since the same amount is being invested in each installment, investors buy more units when the price is low and fewer units when the price is high. Over time, the average cost of acquisition per unit comes down. This is called rupee cost averaging and it’s the primary advantage that SIPs provide investors.
The following table shows the average SIP returns generated by funds in the last five years from different categories. Funds from the IT category are clearly the winner and have generated the best SIP returns for their investors.
|
Sector
|
No. of funds
|
Average of 5-year SIP returns (per cent)
|
Max of 5-year SIP returns (per cent)
|
Min of 5-year SIP returns (per cent)
|
|
IT
|
5
|
36.05
|
39.4
|
30.28
|
|
Small-cap
|
14
|
25.72
|
38.98
|
19.56
|
|
Pharma
|
4
|
25.37
|
28.2
|
23.29
|
|
Energy
|
2
|
24.08
|
27.04
|
21.11
|
|
Mid-cap
|
21
|
21.73
|
30.29
|
15.19
|
|
Multi-cap
|
7
|
20.58
|
31.89
|
16.09
|
|
Consumption
|
9
|
19.12
|
31.51
|
12.86
|
|
Large & Mid-cap
|
22
|
18.75
|
24.41
|
14.59
|
|
DIV Y
|
5
|
18.27
|
20.78
|
16.26
|
|
Flexi-cap
|
37
|
17.99
|
26.97
|
10.49
|
|
ELSS
|
33
|
17.94
|
33.91
|
11.36
|
|
INFRA
|
20
|
17.71
|
30.1
|
9.54
|
|
Value
|
15
|
17.57
|
21.78
|
12.76
|
|
T-ESG
|
1
|
17.40
|
17.4
|
17.4
|
|
THEMATIC
|
10
|
16.94
|
25.72
|
8.51
|
|
Large-cap
|
51
|
16.29
|
21.31
|
10.64
|
|
International
|
30
|
15.86
|
30.91
|
3.46
|
|
MNC
|
3
|
15.29
|
19.22
|
12.93
|
|
BANK
|
11
|
14.35
|
18.23
|
9.24
|
|
PSU
|
2
|
11.20
|
14.72
|
7.67
|
The following are the funds that have generated the best five-year returns in the last five years. Every monthly investment of Rs 10,000 would have turned your investment value to more than Rs 15 lakh. This means that your investment of Rs 6 lakh (5*12*10,000) would have more than doubled.
|
Fund name
|
5-year SIP returns (per cent)
|
SIP value (Rs lakh)
|
|
ICICI Prudential Technology Fund - Direct Plan
|
39.4
|
18.11
|
|
Quant Small Cap Fund - Direct Plan
|
39.0
|
17.88
|
|
Tata Digital India Fund - Direct Plan
|
38.2
|
17.43
|
|
Aditya Birla Sun Life Digital India Fund - Direct Plan
|
37.9
|
17.28
|
|
SBI Technology Opportunities Fund - Direct Plan
|
34.5
|
15.59
|
Note: These are historic returns and may not continue in the future and hence, do not take it as an investment advisory.