How to maximize returns from SIP’s in Mutual funds?

How to maximize returns from SIP's in Mutual fundsHow to maximize returns from SIP's in Mutual funds?

I have been investing in mutual funds for several years through Systematic Investment Plan (SIP). Mutual funds help us to reduce risk as Mutual funds invest across various stocks and various sectors. In this article, I want to share my experiences on the strategies which I have adopted to maximize returns from SIP’s in Mutual funds. I felt these are sure shot ways which you can implement and increase your returns.

How to maximize returns from SIP's in Mutual funds?

1) SIP at various dates in a month: 

Few years back, I started investing in 10 mutual fund schemes and the SIP date was 5th of the month. Means, all my mutual fund schemes would get executed on 5th and mutual fund units would come into my account within 2 to 3 days. Now the real fun started. I used to see that market used to dance for at least once in a month. Either it could be a sudden increase in stock index or sudden fall without any news.

Also read: Top-10 Best Mutual funds to invest for SIP

Though I know that I am not supposed to monitor my mutual fund investments regularly as I intended to invest for long term, like a normal investor, I used to open my every Saturday and Sunday and used to see how much I gained or lost for that week. Over a period of time, I used to get nervous. One day I sat for 2 hours analyzing, how to get the BEST from such situations. One solution which has come to my mind was creating SIP in mutual funds at various dates. I had 10 mutual fund schemes and I cancelled all existing ones and re-created. I created SIP's in such a way like 2 on the 5th of the month, 2 on the 10th of the month, 2 on 15th of the month, 2 on the 20th of the month and 2 on the 25th of the month.  When the market was up or down during 1st week of the month, my 2 mutual fund SIP’s only used to get affected. My other SIP mutual funds had less affect on such market down-swings. I felt this was one of the best strategies one can adopt and gain more from SIP’s.

2) Track your SIP in mutual funds against goals:

Earlier, I invested in several mutual funds. Later I thought I need money either for a child’s education or to buy some assets; I used to redeem my mutual fund units as and when required. I was not able to get good returns as I have redeemed without any prior plan. Later I realized that I am not linking my investments with goals. When you link your SIP in mutual funds with goals, you would have better tracking. I would an example. This about investing for my daughter’s marriage. I invested through SIP in two mutual funds. My aim is not to touch for next 10 to 12 years. Come what, I would not cancel or redeem such mutual fund units. When you set goals and invest for them, there are greater chances that you would get high returns.

3) Increase SIP values year on year:

When I started investing in mutual funds, I kept SIP amount at Rs 3,000 per mutual fund scheme.  Later I have started increasing year on year. Now I invest for Rs 5,000 as SIP per scheme. You can drastically increase your corpus if you are increasing SIP values year on year. You can increase SIP values for existing SIP schemes or you can create new SIP schemes with incremental amount. Do you know that if you invest Rs 10,000 per month in SIP and increase your SIP investment 10% year on year, your corpus would increase from Rs 23.23 Lakhs to Rs 33.75 Lakhs, which is a 45% jump. The values assumed conservatively at 12% annualized returns. This is one of the sure shot ways to maximize returns from SIP of mutual funds.

4) Use STP for lump sum investments:

Is there a way to invest lump investments in equity mutual funds and gain like we get from SIP in mutual funds? The answer is yes. You should adopt the strategy of Systematic Transfer Plan (STP). You can invest lump sum investments in liquid funds or debt funds and ask mutual fund houses to do STP to equity funds. STP works in such a way that your money would be transferred from liquid/debt funds to equity funds regularly every month like SIP. This way you can invest in equity funds and get good returns.

Also read: Best Mutual funds which gave solid and consistent returns

When you are nearing your goal, you should stay away from risky investments, hence you should adopt reverse STP. Means your money would be transferred from equity funds to debt or liquid funds every month over a period of time like SIP. STP strategy would be best for lump sum investments and when you are nearing your goal.

Conclusion: I felt these are some of my experiences on how to get maximum returns on SIP in mutual funds. Since I have already experienced them on positive side, I don’t know whether there are any drawbacks in these features.

Readers, have you implemented any of these tips earlier. If so, what are your experiences?

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How to maximize returns from SIP's of Mutual funds

Suresh KP


  • Yogesh Pohakar

    Hi Suresh,

    This is Yogesh, I am new to mutual fund and have no knowledge about same.

    I would like to invest around 5000 per month for short term of 1 yr or 3 yr.

    Could you please suggest any suitable plans?

    Thanks in advance



  • amar

    Hi Suresh,

    I have following goals, can you please suggest me the mutual funds and types and amount to invest?
    1) trip to korea after 3 years = which will require 2 lacs
    2) marriage after 5 years
    3) own home after 7 years

    I can invest up to 8k now, but I can increase investment over the years as per my salary.
    I am planning to invest from march 17. I like your idea of investing on diff dates.
    how should i approach?

  • manoj bhatt

    Hi sir,

    Would  request you to please  tell me the right method to invest in mutual  fund through sip with minimun risk and highest return.duration is 5 years. And kindly one more thing that is it possible to withdraw my investment before 5 years.

    • Hi Manoj, Investment in mutual funds should be done with long term tenure. The reason is there are many market cycles (upturn or downturn) during this period where you can get good returns. If your need is less than 5 years, better don’t invest in equity mutual funds. If can invest for 5 years, invest in balanced mutual funds. If you can invest for 8-10 years, invest in top equity funds.

  • Mansi

    Hi Suresh,

    I am new to Mutual Funds and have no knowledge about the same. I have just informed by bank relationship manager that I would like to invest 3000 every moth in DSP Blackrock Micro Cap Fund. As I read your articles regularly, understand that one needs to invest as per their goals. I do not have any long term goals but only short term goals such as purchasing a house on home loan of about 50lakhs and then purchasing a car in next 3 years time. Could you kindly advise with such goals which are the MF's that I should invest in? How do I identify which MF's suit my goals and which ones are for short term and long term? Please advise, Thanks

    • Hi Mansi, If you want to to invest in mutual funds for short duration of less than 3 years, go for debt mutual funds. Equity mutual funds may not be good for short term.

  • Adi Reddy

    Hi , This is Adi, Could you please tell me best SIP schemes to invest amount. I want to invest 10k per month.

    Could you please explain about the SIP Schmes

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