CELEBRATING 29 YEARS
A Systematic Investment Plan helps you invest a fixed amount regularly at a specified frequency say, monthly or quarterly. SIP is a simple method of investing used across the world.
When chasing a financial goal, the simplest form of planning is to invest regularly. Most of us calculate our earnings, expenses and savings on a monthly/quarterly basis. The easiest way to plan our investments, therefore, is on a monthly/quarterly basis.
Being disciplined is the key to investing success. With the MF Systematic Investment Plan you commit an amount of your choice (minimum of Rs. 500/Rs. 1000 and maximum no limit) to be invested every month in one or more MF schemes.
Think of each SIP payment as laying a brick. One by one, you’ll see them transform into a building. You’ll see your investments accrue month after month. It’s the perfect solution for irregular investors and regular investors for building wealth.
SIP helps to maintain discipline in your asset allocation. SIP helps avoid the temptation of jumping from one asset class to another during certain market conditions.
By investing a fixed sum at fixed intervals we can buy fewer units when the price is higher and more units when the price is lower. This is called Rupee Cost Averaging. SIP takes care that your average price works out to be lower than the price you would have paid at the market peak. It takes care that you invest across market cycles. Your average price works out to be lower than investing at the market peak. It helps you avoid the temptation of timing your investments “Market Timing” is best left to professionals.
SIP helps you to start investing at an early age to meet the greater expenses of your life. Saving a small sum of money regularly makes money work with greater power of compounding with significant impact on wealth accumulation.
Investing in MF SIP is easy. Simply give us one cheque with application form and opt for an Auto Debit from your bank account for an amount of your choice (minimum of Rs. 500/Rs. 1000 and maximum no limit) and the money will be invested every month in a fund of your choice. The plans are completely flexible. You can invest for a minimum of six months, or for as long as you want. You can also decide to invest quarterly and will need to invest for a minimum of two quarters.
When you invest regularly through SIPand invest for the long term, the benefits are magnified by the compounding effect. Your money grows over time as the money you invest earns returns. And the returns also earns returns, i.e. in effect your actual investmetns over time plus returns get compunded over the years which can grow into a large sum over a period of time.
For example, the graph demonstrates the effect of compounding on monthly investments or Rs. 1000 for a period of 30 years in investments offering different rate of returns, i.e. 6% p.a., 10% p.a. and 15% p.a.
A monthly investmetns of Rs. 1000 for 30 years in an investment offering 6% p.a. return can give you Rs. 10 lakhs vs. Rs. 70 lakhs, an investment offering 15% p.a. return.
