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Top 10 Mutual Funds for SIP to invest in 2021, best sip plan

Top 10 Mutual Funds for SIP to invest in 2021, Benefits of investing through SIP, Criteria for Selecting Best Mutual Funds for SIP

Top 10 Mutual Funds for SIP to invest in 2021: Everyone wants to save and invest for their financial goals. But often you can wait too long to deposit a decent amount to start investing. This can prove to be a hindrance in your investment journey.

If you do not have a large amount to invest in one go, you can opt for the Systematic Investment Plan (SIP) mode of investment offered by mutual funds. The mode of investing is similar to your investment in a recurring deposit (RD) with a bank, where you deposit a fixed amount (in your recurring deposit account), but the only difference here is that your money is invested in a mutual fund. Is. Fund scheme (equity scheme and/or debt scheme) and not in bank deposits.

Often investing a lump sum amount in mutual funds becomes a risky proposition, especially when the market conditions are expected to be highly volatile, which is why investing regularly through SIPs can be more beneficial. Regular investment through SIP helps in averaging out the cost of investment and compounding your wealth. Through SIP mode, you can buy more units when the market is low, so when the market goes up, it results in higher returns.

In Hindi:-

Top 10 Mutual Funds for SIP to invest in 2021: हर कोई अपने वित्तीय लक्ष्यों के लिए बचत और निवेश करना चाहता है। लेकिन अक्सर आप निवेश शुरू करने के लिए एक अच्छी राशि जमा करने के लिए बहुत लंबा इंतजार कर सकते हैं। यह आपके निवेश के सफर में बाधक साबित हो सकता है।

यदि आपके पास एक बार में निवेश करने के लिए बड़ी राशि नहीं है, तो आप म्यूचुअल फंड द्वारा प्रस्तावित निवेश के सिस्टमैटिक इन्वेस्टमेंट प्लान (SIP) मोड का विकल्प चुन सकते हैं। निवेश का तरीका एक बैंक के साथ आवर्ती जमा (आरडी) में आपके निवेश के समान है, जहां आप एक निश्चित राशि (अपने आवर्ती जमा खाते में) जमा करते हैं, लेकिन यहां अंतर केवल इतना है कि आपका पैसा म्यूचुअल फंड में निवेश किया जाता है। है। फंड योजना (इक्विटी योजना और/या ऋण योजना) और बैंक जमा में नहीं।

अक्सर म्यूचुअल फंड में एकमुश्त राशि का निवेश करना एक जोखिम भरा प्रस्ताव बन जाता है, खासकर जब बाजार की स्थिति अत्यधिक अस्थिर होने की उम्मीद होती है, यही वजह है कि एसआईपी के माध्यम से नियमित रूप से निवेश करना अधिक फायदेमंद हो सकता है। एसआईपी के माध्यम से नियमित निवेश निवेश की लागत को औसत करने और आपके धन को बढ़ाने में मदद करता है। एसआईपी मोड के माध्यम से, आप बाजार के कम होने पर अधिक यूनिट खरीद सकते हैं, इसलिए जब बाजार ऊपर जाता है, तो इसका परिणाम उच्च रिटर्न में होता है।

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Benefits of investing through SIP:

  • It’s light on the wallet
  • It makes time to market irrelevant
  • Enables you to lower the average cost of investment
  • You benefit from the sum of money
  • It is an effective means of planning your financial goals
Mutual Fund-SIP

Top 10 Mutual Funds for SIP in 2021

CategoryFund Name
Large CapUTI Nifty Index Fund-Direct-Growth
Large CapHDFC Fund Index Sensex Plan-Direct-Growth
Mid CapICICI Pru Nifty Next 50 Index Fund-Direct-Growth
Mid CapUTI Nifty Next 50 Index Fund-Direct-Growth
Mid CapHDFC Mid Cap Opp Fund-Direct-Growth
Mid CapFranklin India Prima Fund-Direct-Growth
Multi CapParag Parikh Long Term Equity Fund-Direct-Growth
Multi CapAxis Multi Cap Fund-Direct-Growth
HybridHDFC Hybrid Equity Fund-Direct-Growth
HybridFranklin India Equity Hybrid Fund-Direct-Growth
Top 10 Mutual Funds for SIP in 2021

Other Recommendation

CategoryFund Name
Small CapDSP Small Cap Fund-Direct-Growth
Small CapFranklin India Smaller Companies Growth-Direct-Growth
ELSS or Tax SavingBirla Sunlife Tax Relief 96-Direct-Growth
ELSS or Tax SavingDSP Tax Saver Fund-Direct-Growth
Other Recommendations Best Mutual Funds for SIP In 2021
Mutual Funds

Criteria to keep in mind while selecting the best mutual fund for SIP:

Quantitative Parameters:

Analyze whether the fund has shown consistency in performance across various market periods (bull and bear market phases) as compared to its benchmark and category peers. While all funds can perform well during the bull phase, an important parameter when selecting mutual funds for SIP is to determine their ability to manage downside risk during tough market conditions.

For this, determine whether the fund has rewarded its investors well for risk over 3 years using risk-reward ratios such as the Sharpe Ratio, Sortino Ratio and Standard Deviation.

Prefer funds that are strong on risk-reward parameters while shortlisting funds for your portfolio.

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Qualitative Parameter

Qualitative parameters are often overlooked, although they are an essential aspect of the selection process. This includes determining the quality of the portfolio and the efficiency of the fund manager/house.

The fund house should have a significant performance record and follow robust investment practices with adequate risk management systems.

And since the performance of a mutual fund directly depends on the ability of its fund manager to identify stocks/sectors/themes with better potential, examine the fund manager’s qualifications and experience and the track record of other schemes managed by them. Do it.

Check out the fund’s portfolio to see how diversified it is across stocks/sectors. Remember that a concentrated portfolio can put you, the investor, at greater risk. Ensure that the scheme optimally diversifies your portfolio within its specified investment mandate. Multi-cap, large-cap, mid-cap, large and mid-cap, and small-cap to help it deal with adverse market conditions and mitigate the effects of volatility.

Also, keep a watch on the churn rate of the securities in the portfolio as a high churn rate can make the portfolio prone to volatility and negatively affect the overall returns of the scheme. By analyzing the portfolio turnover ratio and the expense ratio, assess how efficiently the fund controls churn and limits expenses.

At Personal FN, we select and recommend mutual funds based on quantitative and qualitative parameters using our S.M.A.R.T score matrix:

S – Systems and Processes

M – Market Cycle Performance

A – Asset Management Style

R – risk-reward ratio

T – Performance Track Record

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Top 10 Mutual Funds for SIP to invest in 2021

Outlook for Equity Funds in 2021:

The Indian economy registered a positive growth rate of 0.4% in Q3FY21 after contracting for two consecutive quarters. However, the recent resurgence in COVID-19 cases seen in many parts of the country has once again raised concerns about the sustainability of the economic recovery.

Furthermore, not all components of India’s GDP are showing growth. The readings could likely slip back into a contraction for the coming few quarters, which means we could see a sort of ‘W-shaped’ recovery, where we will dip again before going up.

Despite this, the equity market backed by smooth liquidity conditions continues to trade at all-time highs. As a result, valuations in the Indian equity markets have become costlier (the mark P/E is around 35x) and the margin of safety in the market capitalization has gone down. While the announcements of the Union Budget 2021-22 have raged the bulls, the possibility of intermediate corrections and higher volatility cannot be ruled out.

Looking at the current scenario, it is advised to be cautious with your investment approach. Invest in only those funds which are well prepared to handle uncertain market conditions. In the current scenario, it would be wise to diversify the market capitalization in a diversified manner (preferably through SIP). This will help you to hedge the risk better and negotiate the volatility of the market intelligently.

Going forward, do not stop or redeem your SIPs, even if the market corrects or the volatility increases and volatility increases. Note that if the Indian equity market corrects from the current high, which is possible, more units will be allotted against your SIP instalment, and when the market starts climbing again, it will add to your funds.

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FAQs on Top 10 Mutual Funds for SIP to invest in 2021

Is SIP Tax-Free?

SIP can be the best tax-saving instrument with a high return on your investment. You can claim a deduction of up to Rs. 1.5 lakh from your taxable income for investing in ELSS through SIP under section 80(c) of the Income Tax Act, 1961.

Is there risk in SIP?

Though SIP has a risk, one should always remember that SIP or lump sum, is just an investment route and not an underlying investment. One needs to look at the underlying investment, and its risks and then take the final decision

Are SIP returns guaranteed?

Many of them believe that investing through SIP gives guaranteed returns. This is not true. SIP is an investment option that allows you to invest in mutual funds over some time, usually equity mutual funds. It helps you to invest in a disciplined manner regardless of the current market conditions.

How much tax do I pay on my SIP return?

You will be taxed at 20 per cent (plus indexation, making it 20.8 per cent) with the indexation benefit. But after January 2019, short-term capital gains tax will be applicable for your SIP. Gains from short-term capital gains will be added to your income and taxed as per your income tax slab.

Is SIP better than FD?

Based on your financial goals, you can decide whether mutual funds, systematic investment plans or fixed deposits are the right options. Each investment plan has its benefits. While a SIP or mutual fund may give you higher interest, an FD is a more secure option that provides assured returns.

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