SYSTEMATIC INVESTMENT PLANS
A Systematic Investment Plan (SIP) is a vehicle offered by Mutual Funds to help you save regularly.
It is just like a recurring deposit with the post office or bank where you put in a small amount every month. The difference here is that the amount is invested in a mutual fund.
The minimum amount to be invested can be as small as Rs 100 and the frequency of investment is usually monthly or quarterly.
How an SIP works
An SIP allows you to take part in the stock market without trying to second-guess its movements.
An SIP means you commit yourself to investing a fixed amount every month.
When the Market price of shares fall, the investor benefits by purchasing more units; and is protected by purchasing less when the price rises. Thus the average cost of units is always closer to the lower end. { NAV : Net Asset Value , or the price of one unit of a fund. Can be computed as follows : NAV = [ market value of all the investments in the fund + current assets + deposits - liabilities ] divided by the number of units outstanding.}
SIP calculations which shows how SIP is beneficial in long term:.
|
1. Investor has started SIP on 1st Jan 2008 |
|
|
|
|
|
|
|
|
2. SIP frequency Monthly of Rs. 10000/- |
|
|
|
|
|
|
|
|
3. Value below is as on 31st Dec 2010 |
|
|
|
|
|
|
|
|
4. Total SIP period 3 years (36 Months) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheme |
Current NAV |
Total No. of Installments |
Total Amount Invested |
Present Value |
Yield % |
Profit-SIP |
Profit-One Time Investment |
|
Birla Sun Life Advantage Fund - Growth |
162.27 |
36 |
360,000 |
477,147 |
18.85 |
117,147 |
(62,999) |
|
Birla Sun Life Frontline Equity Fund - Plan A - Growth |
89.56 |
36 |
360,000 |
515,013 |
24.27 |
155,013 |
32,568 |
|
DSP BlackRock Equity Fund - Growth |
16.681 |
36 |
360,000 |
520,826 |
25.08 |
160,826 |
27,280 |
|
DSP BlackRock Top 100 Equity Fund - Growth |
101.407 |
36 |
360,000 |
494,111 |
21.31 |
134,111 |
24,721 |
|
Franklin India Bluechip - Growth |
217.6831 |
36 |
360,000 |
522,432 |
25.30 |
162,432 |
44,306 |
|
Franklin India Prima Plus - Growth |
219.8237 |
36 |
360,000 |
495,311 |
21.48 |
135,311 |
11,805 |
|
HDFC Equity Fund - Growth |
282.216 |
36 |
360,000 |
584,186 |
33.52 |
224,186 |
92,366 |
|
HDFC Top 200 - Growth |
212.772 |
36 |
360,000 |
544,844 |
28.35 |
184,844 |
89,938 |
|
Reliance Growth - Growth |
475.4121 |
36 |
360,000 |
510,544 |
23.64 |
150,544 |
(1,086) |
|
Reliance Vision - Growth |
272.8275 |
36 |
360,000 |
485,663 |
20.09 |
125,663 |
(21,014) |
|
Sundaram India Leadership Fund - Growth |
43.5506 |
36 |
360,000 |
491,252 |
20.90 |
131,252 |
(55,245) |
|
Sundaram Select Focus - Growth |
91.2859 |
36 |
360,000 |
453,422 |
15.30 |
93,422 |
(58,160) |
|
|
|
|
|
|
|
|
|
|
Benchmark Returns |
|
|
|
|
|
|
|
|
S&P Nifty |
5762.85 |
36 |
360,000 |
473,539 |
18.32 |
113,539 |
(22,352) |
|
BSE Sensex |
19224.12 |
36 |
360,000 |
474,986 |
18.53 |
114,986 |
(19,092) |
|
BSE200 |
2377.13 |
36 |
360,000 |
479,500 |
19.19 |
119,500 |
(39,387) |
|
BSE100 |
10018.36 |
36 |
360,000 |
473,650 |
18.33 |
113,650 |
(37,747) |
|
CNX500 |
4636.2 |
36 |
360,000 |
473,705 |
18.34 |
113,705 |
(50,033) |