SYSTEMATIC INVESTMENT PLAN (SIP) - Mutual Funds ?· SYSTEMATIC INVESTMENT PLAN (SIP) A method of investing…
Post on 05-Jun-2018
SYSTEMATIC INVESTMENT PLAN (SIP)
A method of investing a fixed sum, regularly, in a mutual fund schemeover a period of time. Investing systematically provides for benefits of: inculcating savings habit protection against market volatility long term wealth creation.
1. SIP inculcates Savings Habit : Little by little, You can save a lot!
Dinner Movie Shopping
SIP = Savings Habit
Cumulative Amount @ 10000 p.m
Rs. 10000 pm saved over 10 years is Rs. 12 Lakhs
SIP facilitates disciplined approach of investment on a regular interval; in a way it inculcates a savings habit which goes to accumulate a substantial amount over a longer time period. SIP is an ideal way to enter capital markets with an aspiration to create wealth.
Disciplined & Constant Interval Buying has helped tide over the volatility
Imagine, if one could always pick the right time to buy and sell. However, timing the market is a time-consuming and risky task. Through disciplined and regular investments, one can stop worrying about when and how much to invest. In short, SIP eliminates the need to actively track the markets.
Moreover as we know, its not the time but the timing in the market that matters, investing for a longer time horizon aims to capture the growth potential of equities, enhances the probability of better returns and aims to facilitate wealth creation over the time.
Nifty 50 has given 13.42% SIP returns over last 15 yrs! (Refer to pt 3 for more details on SIP working)Past performance may or may not be sustained in future.
Past performance may or may not be sustained in future. (Refer to Disclaimer for methodology)
Power of Compounding A little now can mean a lot later At 7% your money will grow into ` 1.20 crs At 15% your money would have grown to ` 7 crs
Note The graph above is only for illustration purposes, purely to explain the concept of SIP and power of compounding.
For eg, If one had invested in SIP of ` 10,000 p.m over 30 yrs @ 7% p.a (rate of interest assumed), his money would have grown to the ` 122 lakhs over this time period.
Growth Potential of Equities leading to Creation of Wealth ` 18 lac invested in Nifty 50 has grown to ` 53 lacs over 15 yrs! (i.e from 1st July 2001 to 30th June 2016)
SIP @ 10000 p.m as on 30th June 2016. Refer common disclaimer for more details on methodology.
Past performance may or may not be sustained in future.
SIP Goal based Long term investing toolEvery individual has dreams about the future. To fulfil those dreams, the individual should set goals, plan to reach those goals and then work to execute the plan. Each stage is important till every goal is reached and the dream is realized. An investor can set up SIPs for various goals in life. They could be for self or for family and for buying an asset saving or retirement.
COMMON DISCLAIMER FOR PERFORMANCE SNAPSHOT OF SYSTEMATIC INVESTMENT PLAN (SIP) RETURNSPast performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.Returns on SIP in Nifty 50 are annualised and cumulative investment return for cash flows resulting out of uniform and regular monthly subscriptions have been worked out on excel spreadsheet function known as XIRR. It is assumed that a SIP of ` 10,000/- each executed on 1st of every month has been taken into consideration including the first installment. It may please be noted that load has not been taken into consideration. The amounts invested in SIP and the market values of such investments at respective periodic intervals thereof are simulated for illustrative purposes for understanding the concept of SIP. This illustration should not be construed as a promise, guarantee on or a forecast of any minimum returns. The Mutual Fund or the Investment Manager does not assure any safeguard of capital and the illustrated returns are not necessarily indicative of future results and may not necessarily provide a basis for comparison with other investments. SIP does not guarantee or assure any protection against losses in declining market conditions. Investors are requested to consult their financial advisor before making any investment decisions.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Rolling Returns of BSE Sensex over 3,5 & 10 years since 1st Jan 1980 till 30th June 2016 highlighting instances of negative & positive returns:
2. SIP aims to protect against market volatility:
3. SIP Aims to create long term wealth
4. Systematic Investment Plan (SIP)can be a Bridge between Goal & Accomplishment
Lower units at higher prices
Higher units at lower prices
50%5 Years 10 Years
Positive Instances Negative Instances
You invested `10,000 every month for 30 years
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
No of years 7% 9% 12% 15%
Nifty 50 - SIP @ 10,000 p.m
Amt invested Present value
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 5,500,000 6,000,000
5 yrs 10 yrs 15 yrs
Average RollingReturns (CAGR
3 Years 5 Years 10 Years
16.1% 15.9% 16.2%
Common Source: BSE India , NSE India & MFI Explorer