What is an SIP fund? Is it advisable to invest in these funds as of now? how about tata SIP funds?

Question

Give e the deatails of the SIP funds?

Answer 1

SIP is an investment plan designed for anyone looking for regular investment, where you invest fixed amounts every month in any funds. SIP thus helps you regularly by making investment in an asset class of your choice.



Your account gets credited with proportionate units every month and you receive an up-dated statements reflecting your transactions.

investors must remember that by adopting this discipline of saving and investing on a regular basis, this could benefit in 2 respects,

First, they can avoid the temptation of timing the investment "Market Timing" is an activity best left to professionals.

Secondly, the way to weather market cycles successfully is with the disciplined and periodic investing an equal amount of money at regular intervals.Regular subscriptions to a mutual fund are as excellent way in which to save and invest on regular basis.

Based on the the above explanation and my knowledge,infrastructure funds seem to be a good investment avenue.You could find out details maybe about the Tata infrastructure fund and decide!

Answer 2

SIP - Systematic Invesment Plan. It is the best way to invest in a Mutual Fund. For i.e. initially you can buy 100 units for Rs. 10 each, which equals to Rs. 1000 investment. Then you can go in for SIP, and instruct the fund, to deduct Rs. 500 - Rs. 1000 or any suitable amount, to pick up the units, every month. In this way, you will be investing in the mutual fund, on a monthly basis, and you will be picking up the units, at its' high and its' lows. Go for it. SIP is the best !!!

Answer 3

SIP means Systematic Investment Plan. This method of purchasing Mutual Funds. U have to select a fund and decide to invest in 3yrs or 5yrs and monthly invest 500/1000 per month in particular fund.This is just like RD depsit. But it is retun like more than 30% and after 5 you will get lucarative income. this best method of income

Answer 4

Not at current prices when mkt is near all time high. Take care of money though there will be too many people telling you for SIP. It is only to give fat salaries to analysts who do nothing when market falls, they take the credit when market goes up. Forget it and sleep and put money in fixed deposit rather.

Answer 5

SIP: Best investment policy
Zealous advertising by asset management companies leads to some concepts and products being misunderstood by customers. They come up with unusual requests, which put service providers in a spot.
I market mutual fund products. Recently, a client came up to me and asked for an application form for systematic investment plan (SIP). I replied, "Wonderful, which scheme you want to start an SIP for?"
He got a bit agitated and looked at me with disgust. He gave a supercilious guffaw and said, "What do you mean which scheme? Don't you know SIP is a fund which has given stupendous returns on your investments."
It took a bit of convincing to reassure him about my professional competency. He backed down a bit and listened to my take on SIP.
An SIP is an old tried and tested method of investing. It is not a miraculous investment scheme that gives outstanding returns.
SIP is a method of investing a fixed /regular sum every month or every quarter. The investment can be in the scheme of your choice as most mutual funds give you this facility for their schemes. In other words, instead of investing lumpsum in one scheme you invest a smaller fixed amount every month or every quarter.
For example: If your scheme of choice is, say, HDFC Top 200 or DSPML TIGER and you want to invest Rs 1,00,000 in it. Instead of issuing a cheque of Rs100,000 at one go, invest Rs 5000 every month for 20 months. This is systematic investment planning.
The biggest plus which SIP provides you with is regular disciplined savings. I have observed that the urban yuppie is living an EMI-supported lifestyle
Homes, cars, timeshare memberships for holidays, laptops, all sorts of consumer durables are bought on EMIs, which eat into their salaries. It is virtually impossible to accumulate a decent sum which can be invested at one go. An SIP gives them the benefit of piecemeal investing of small sums.
Every month, like all other EMIs, this also gets deducted from the bank a/c through electronic clearing service, which is convenient. A SIP does not pinch the pocket much if started at an earlier stage. It adds the power of compounding to your savings. An illustration of power of compounding works as under:
Suppose every year you invest Rs 60,000 at 12 per cent per annum. After 30 years it will add up to Rs 1.60 crore (Rs 16 million). If the savings were started 5 years later the kitty accumulated would be lower by Rs 90 lakh (Rs 9 million) to just Rs 89 lakh (Rs 8.9 million). Just an early start of five years, that is, an additional Rs 3 lakh (Rs 300,000) of incremental investment increases your corpus by almost a crore (Rs 10 million). That is the power of compounding.
Want more money to retire comfortably? Start one more SIP, for a higher amount.
SIP facilitates averaging costs over a period of time. Since you are investing the same amount every month or every quarter, the average NAV at which you have acquired the units will be lower.
Let's say, Mr Z invests Rs 5,000 every month and has started the SIP in September 2006 (Table I).
Table I
Month Amount invested (Rs)NAV (assumed)Units allocated
Sept 065,00010500
Oct 065,00010.5476
Nov 065,0009555
Dec 065,00013384
Jan 075,0008625
25,0002,540
As you can see more units are allotted to Mr Z when the NAV is lower and fewer number of units are allotted when the NAV is higher. The average cost per unit for Mr Z is Rs 25,000/2,540 = 9.85 and the average cost during the same period would work out to (Rs 10+10.5+9+13+8/5=10.1)
Had Mr Z invested his Rs 25,000all at once in September 2006 he would have been allotted 2500 units at the cost of Rs 10. This is assuming a no load structure in both the methods of investing.
Wait, there is a qualification!!. If a SIP is started for a short period or especially during a singular bull run ,it will work against you. Every time you invest it will be at a higher NAV and the units allotted will be lower. Well, then where is the misunderstanding?
With so many points in its favour, you might believe that one just cannot err with an SIP. That's incorrect. There is a certain way of reading the performance of an SIP vis a vis lumpsum which is explained below. A leading equity scheme has showcased these returns as per the table below:
The table assumes an investment the scheme Rs 1,000 per month. SIP against a lumpsum investment every year for five years, three years & one year, the returns would be as follows (Table II):
Table II
5 years SIP3 years SIP1 Year
SIP investmentsRs 1,000 p.mRs 1,000 p.mRs 1,000 p.m
Total amount invested60,00036,00012,000
Returs (annualized)54.18%50.81%38.53%
On Time investmentsRs 12,000 p.aRs 12,000 p.aRs 12,000 p.a
Total amount invested60,00036,00012,000
Returns (annualized)50.60%43.53%34.15%
Clearly, the returns earned though an SIP is higher across all periods. But if you notice, returns from a lumpsum investments were not all that bad either. This scheme had also beaten the benchmark whether you invest via an SIP or a lumpsum. (Since the scheme name is not revealed, benchmark becomes irrelevant)
Sometimes, the underperformance is cleverly couched by highlighting the SIP returns only. Returns across other parameters and compared with the benchmark may be poor.
So one must study all the parameters before deciding to invest. Unfortunately if you have chosen a dud scheme to invest systematically in, it will not transform its laggard status and give you poor returns for sure.
An SIP should be treated as what it is, a nice process of investing. The true test of a mutual fund scheme is its ability to beat its peers as well as its benchmark consistently.
The correct approach is to pick out a leading pedigree scheme, a consistent performer in a category, which suits your risk appetite, to systematically invest in.