Systematic Investment Plan
 
What is Systematic Investment Plan
Systematic Investment Plan (SIP) is a disciplined way of investing, where you invest, fixed amounts at a regular frequency. You often decided to start saving and investing regularly,but get caught in your day to day activities and forget investments. SIP, the time tested investment approach helps bring in the much needed disipline, and shown good results the world over.
How does a SIP work
  • Decide the amount to be invested per month
  • Choose a scheme
  • Issue cheque for 1st installment.
  • Future installment will be debited from your BankAccount.
What's special about SIP?
 
In addition to getting you into the habit of saving regularly, SIP puts two powerful forces to work for you.

Month
Amount you invest
NAV
No. of units
1
2
3
4
5
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 10
Rs. 12
Rs. 10
Rs.  8
Rs. 10
100.000
083.333
100.000
125.000
100.000
Total
Rs. 5000
Rs. 50
508.333


The average NAV = 50/5 = Rs. 10.00

Your average price = Your total investment / Total no. of units
                               = 5000 / 508.333 = Rs. 9.84

What you see from the table above is the fascinating aspect of Rupee Cost Averaging. It makes you busy fewer units when the price is high and more units when the price is low, thereby bringing down your average cost. Moreover, this gives you the same discipline as investment professionals. While Rupee Cost Averaging does not assure you of a profit, it is known to have worked well for millions of investors throughout the world.
 
Small Investments Mega Returns
 
Investors who invested Rs. 10,000 every month in the following schemes would have reaped these returns
       
Scheme Growth
Nav**
Value **
Annual Return
Reliance Growth
483.561
36,83,806.10
33.20%
HDFC Equity Fund
289.961
34,66,429.37
31.70%
SBI - M Sector Fund Umbrella Contra
171.556
24,81,079.29
23.46%
Franklin - India Oppt Fund (G)
32.8452
23,12,185.64
21.73%
Kotak - 30 (G)
105.541
26,54,096.36
25.11%
 
* SIP Start date: 28-Dec-2002 ; SIP End Date: 29-Nov-2010

** Total Investments: 960,000 ; NAV & Value as on: 29-Nov-2010
 
Advantages of SIP
 

An SIP helps you reach your financial goals by investing a fixed sum monthly / quarterly, in your chosen fund, for a pre-determined number of periods. So that you -

  • Average out on market fluctuations (no need to time the market).
  • Get investment discipline, helping you invest for and reach your future goals.
  • Invest disposable funds – that might otherwise lie in Savings accounts, earning low interest and letting inflation eat into them.
 
For application forms and more details, please contact us.