Can I invest in Large Cap Funds via SIP?
Last Updated : Sept. 17, 2019, 3:35 p.m.
While reading newspapers and listening to television ads, you might come across the line that says, “Mutual fund investments are subject to market risks. Please read the scheme document carefully before investing’’. This may make you ponder whether it’s worth putting your penny in this asset class considering the risks involved. The weak market environment does impact, but if the company has solid management backed up with efficient cash flows, the effect will be much lesser. That’s what the large-cap funds bank on and are chosen for.
Yes, these funds invest in stocks of top companies according to the market capitalization. To be in that elite list requires immense customer loyalty and smooth operation without any interruption. While large-cap funds tend to remain strong even as negative sentiment takes effect into the broader market, investing in such a fund via a Systematic Investment Plan (SIP) gives investors the breathing space they require in a falling market scenario. Let’s see in this post how SIP, a regular approach to investing in a mutual fund, can help you sail through the market lows.
How Can the SIP Work Better in a Large-cap Fund?
The SIP comes with a rupee-cost averaging concept that helps investors accumulate more units at a lesser price when the market hits lows and less units at a greater price when the market hits highs. What this does is average the cost of investment and thus eliminates the need to time the market. As the market jumps high, the power of compounding feature will help SIP investments accumulate into a very large sum over time.
List of Large-cap Funds with Impressive SIP Returns
| Large-cap Funds | Rating | 1-year Return | 3-year Return | 5-year Return | 10-year Return | 15-year Return | 20-year Return |
|---|---|---|---|---|---|---|---|
| Axis Bluechip Fund | 5 Star | 9.40% | 11.67% | 11.20% | - | - | - |
| HDFC Top 100 Fund | 4 Star | -3.90% | 4.33% | 7.37% | 10.55% | 13.18% | 18.56% |
| Mirae Asset Large Cap Fund | 5 Star | 0.18% | 6.30% | 9.69% | 14.28% | - | - |
| SBI Bluechip Fund | 4 Star | 1.16% | 3.19% | 6.36% | 11.80%- | - | - |
| Reliance Large Cap Fund | 5 Star | -8.38% | 2.90% | 6.53% | 11.56% | - | - |
Note – The data is sourced from Value Research as on September 16, 2019. The calculations are made based on SIPs made on the 1st of every month.
How to Invest in Large-cap Mutual Funds via SIP Online?
Wishfin is an online financial marketplace where you can get the best of large-cap funds to invest in. You can visit the website, compare different mutual fund schemes and invest according to your financial goals, investment horizon and risk appetite. Want to know the elaborate investment process? Read out the points below.
- Visit www.wishfin.com
- Click on ‘Mutual Funds’
- Go to Login/Register
- A new investor would need to register first before he/she can create a login
Registration Steps
- Enter your mobile number
- Enter the One-time Password received at the prescribed space
- Click on ‘Verify and Continue’
- Provide your name, email ID, the city you live in
- Create a password that meets requirements in terms of alphabet, numeric and special characters
- Click on ‘Sign Up’
Login Steps
- Enter your mobile number
- Enter the One-time Password received at the prescribed space
- Go to ‘Explore Mutual Funds’
- Click on ‘Equity’ icon
- Click on ‘Large Caps’
- Press the ‘Invest’ button placed below the scheme
Shall You Consider Investing Money Using Step-up SIP Option?
A step-up SIP is an add on to the good work of the SIP by increasing the possibilities of a significantly high corpus over time. With this, you give the respective Asset Management Company (AMC) the authority to deduct an additional amount every year. To achieve the desired result, it is important you set the additional amount in line with the goal you want to achieve over time.
For instance, if you want to generate a corpus of ₹1 Crore in 15 years. But you can invest only ₹10,000 every month. At this pace, you could only churn around ₹23-25 lakh at an assumed annual return of 12%. But if you activate step-up SIP by authorizing the AMC to deduct ₹2,000-3,000 every month from the next year and so, you will go past the 1 crore mark in 15 years.
How Can You Create Space for Additional Investments?
If you want financial independence, you have to create space for additional investments. Below are some tricks that can help you do so.
Utilize Your Annual Increments Judiciously – Try to utilize the annual hike in your remuneration judiciously by not wasting it anywhere. Let the hike work for you by using it for step-up SIP investments.
Control Your Expensive Buys – Don’t splurge in your daily routine. Know the importance of taking money to greater heights over time instead of just throwing it around by spending on unnecessary stuff.
How to Activate Step-up SIP on Your Mutual Fund Investments?
While filling the mutual fund application form online, you can come across the step-up SIP option. What you need to do is to enter the initial amount, step-up amount, step-up frequency, etc. In case you don’t get it activated at the start, you can get it done anytime. Just ask for the form and mention the required details.
Disclaimer – “Mutual fund investments are subject to market risks. Please read the scheme document carefully before investing”